Next chief says review won’t change rates bill
LORD Wolfson, the chief executive of Next, said the government’s review of business rates launched this week was unlikely to affect larger retailers, with large store portfolios, as the tax bill shifts from struggling high streets to their more successful counterparts.
Business rates deliver around £25bn to the Treasury every year, but they have been blamed for the demise of the high street, with retailers arguing that they pay an unfair proportion of tax compared with other industries.
Speaking at Next’s full-year results yesterday, Wolfson said: “The review will be important in that it means that underperforming high streets will have their rates adjusted to reflect the new reality. But then over-performing high streets will also have their rates adjusted. So anyone with a balanced portfolio will be unaffected.
“For retailers with lots of shops, there are going to be as many winners and losers because ultimately the government cannot afford to raise less money through business rates,” he added.
The company, which has 539 stores in the UK & Ireland and 188 franchises overseas, reported a 12.5 per cent rise in underlying profit before tax to £782m in the year to the end of January, with total group sales reaching a record £4bn, up 7.2 per cent on last year.
However, shares slid 3.74 per cent as Next cut its sales and profit guidance for the current year, blaming tough comparatives from last year when it had an especially strong collection and the warm weather boosted sales.
It now expects sales growth of 1.5 to 5.5 per cent this year, compared to its previous guidance of 2.5 to 7.5 per cent.