Sports Direct owner Mike Ashley warns of closures after business rates review delay
Mike Ashley’s Frasers Group, formerly known as Sports Direct, has warned it could be forced to close stores after the government delayed a business rates review.
The government has promised a “fundamental review” into the long-term future of business rates. In March it gave retail, hospitality and leisure businesses a year-long holiday from the tax due to the coronavirus crisis.
However, yesterday the government said the next rates revaluation will not take effect until 2023 based on property values in April 2021 so they reflect the impact of the pandemic.
Therefore next year’s business rates will be paid based on values from 2015.
Frasers said the delay had “kicked businesses when they are clearly down”.
In a statement today the retailer said: “We expect that the government’s inaction will drive further stores and businesses on our high streets into closure, in the process costing many people their jobs and livelihoods.”
It added: “There are House of Fraser stores paying no rent but still losing money and that a business rates correction could dramatically change the situation in terms of saving stores.
“However with yesterday’s announcement, Frasers Group will again have to carefully review the viability of a number of stores within its portfolio.”
Shares in Frasers, 64 per cent of which are owned by Ashley, closed down 2 per cent at 282 pence, valuing the business at £1.45bn.
Most of Ashley’s outlets are still called Sports Direct, though the corporate name was changed as the group also now owns the House of Fraser and Flannels chains.