GAME owner Mike Ashley has hit out at what he calls the “near worthless support package” for retailers unveiled by the government this week – and warned of possible store closures as a result.
In a statement issued to the London Stock Exchange, Frasers Group, which wholly owns GAME, slammed the business rates relief announced by Chancellor Rishi Sunak as part of the budget this week.
The rates holiday for non-essential retailers in England ends in June 2021. This means that from the start of July, business rates, which are taxes on properties used for commercial purposes, will be discounted by two-thirds for nine months – up to a maximum of £2m if businesses are closed.
“The £2m rates cap on ‘businesses’ from July 2021 to March 2022, makes it a near worthless support package for large retailers,” the Frasers Group said.
“For Frasers Group this cap will make it nearly impossible to take on ex-Debenhams sites with the inherent jobs created. It will also mean we need to review our entire portfolio to ascertain stores that are unviable due to unrealistic business rates.
“Frasers Group believes that retailers should pay the fair amount of rates in line with realistic rateable values, but instead we continue to have an unwieldy, overly complex, and out of date business rates regime.”
Ashley has warned of big losses due to the pandemic. Last month, after the government announced non-essential retailers in England would have to wait until 12th April at the earliest to reopen, Frasers Group said it expected to take a hit of more than £100m.
Frasers Group, which also owns Sports Direct, House of Fraser and Flannels, said it had hoped for further rates relief “until structural reform is implemented”.
The note about taking on ex-Debenhams sites is in reference to Frasers Group’s interest in taking on a number of former Debenhams stores. Ashley had made an offer for Debenhams when it was initially put up for sale last April, but it was rejected. Fashion company Boohoo bought the Debenhams brand and website in January, leaving many of the chain’s 118 remaining shops vacant.
The high street has taken a significant hit from the coronavirus pandemic and lockdowns, with the rise of online shopping putting the likes of GAME under significant pressure. GAME stores used a click-and-collect service to sell the PlayStation 5 and Xbox Series X and S late last year (read Emma’s report on what a console launch looked like in 2020 for more), but they remain closed with staff furloughed.
Source : Eurogamer