Mike Ashley’s Frasers Group, formerly known as Sports Direct, has written to the Prime Minister to ask him to urgently review the business rates scheme.
In a letter to Boris Johnson, Frasers Group finance chief Chris Wootton urged the government to reform the transitional relief system, which he said results in some stores “paying the incorrect amount of rates”.
The letter to Number 10 comes after Ashley warned that more House of Fraser stores will be forced to close unless the “broken and unworkable” business rates system is tackled, saying his company can wait “months, not years” for reform.
“I would stress the urgency of the fundamental review of the business rates regime as we will no doubt unfortunately see further large retail failures in the New Year, and as we have noted publically we can no longer sustain our current portfolio of House of Frasers and have begun [to] close down procedures in some cases,” Wootton said in the letter sent at the end of December.
“I would be more than happy to speak directly to you…to help bring about change and hopefully try and save our high streets as far as possible.”
He added that the company is not “seeking an instantaneous revision of rates” but said if retailers could see “light at the end of the tunnel” they could subsidise loss making stores until changes are made.
Business rates have been repeatedly cited by retailers as one of the biggest hurdles facing the UK’s embattled high street.
Speaking at a London Assembly meeting this morning, British Retail Consortium policy adviser Dominic Curran said: “Business rates for retailers account for half their total tax bill and that’s been rising steadily for a decade.
“Retail is five per cent of the UK economy, pays 10 per cent of business taxes and 25 per cent of business rates.
“It disproportionately hits those businesses which are allocated in high value areas and it also disproportionately hits businesses with large footprints.”
City A.M. has contacted the Prime Minister’s office for comment.