Frasers Group, previously known as Sports Direct and owned by Mike Ashley, is expressing its concerns over the UK government’s decision to delay the next business rates valuation until 2023. Business rates are taxes imposed on commercial properties to support local services, and they have been an immense burden on retailers. Initially, the government had promised a review of business rates and provided exemptions for the retail, hospitality, and leisure sectors during the COVID-19 crisis. However, with the delay in revaluation, next year’s business rates will be based on property values from 2015, failing to reflect the true impact of the pandemic.

In a recent statement, Frasers Group emphasized the already vulnerable state of the high street and the devastating consequences of the COVID-19 lockdown. The company criticized the government for neglecting the critical issue of business rates, which are further straining distressed businesses. Frasers Group argued that revising business rates could have significantly altered the economic feasibility of some House of Fraser stores, even those currently paying no rent but still facing losses. As a result, the company intends to reassess the viability of several stores within its portfolio.

Shares in Frasers Group, with majority ownership by Mike Ashley at 64%, closed down by 2% at 282 pence, resulting in a valuation of £1.45 billion. While most outlets still operate under the Sports Direct name, Frasers Group also possesses the House of Fraser and Flannels chains.

The postponement of the business rates revaluation has generated concerns within the retail sector, which has been severely impacted by the pandemic. Many retailers are already struggling, leading to significant job losses. The government’s decision to defer revaluation until 2023, based on property values from April 2021, has been heavily criticized for failing to address the current challenges faced by businesses. The consequences of this delay on the already beleaguered high street remain uncertain, leaving retailers questioning whether further government support will be provided in these challenging times.

Useful links:
1. Government Guidance on Business Rates
2. Financial Times article on the impact of business rates on retailers