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Rates review urged to avoid more High Street casualties

wantspacegotspace.co.uk - Rates review urged to avoid more High Street casualtiesA review of business rates should be brought forward urgently by the Government following a fresh wave of retailers facing collapse which is putting thousands of jobs at risk, according to rating expert David Cureton.

The postponement of the 2015 rating revaluation – which would have helped many struggling firms – was imposed for purely political reasons and is hitting retailers hard, said David.

The head of rating at chartered surveyors Johnson Fellows – the Birmingham-based retail specialists - supports the British Retail Consortium’s call for action to tackle high costs for shop-based retailers, particularly business rates.

“Despite taking advice from Mary Portas on the future of retailing in England, the Government has chosen to ignore the vast majority of recommendations – including not postponing the 2015 revaluation,” he said.

“Had the rating revaluation taken place it would have assisted many struggling firms, including the majority of High Street retailers. The ones that benefit substantially from the postponement are the large office occupiers in the City of London.

“I believe the postponement is purely political as the rates bills for 2015/16 would hit the desks of occupiers shortly before the next General Election. With more and more retailers facing severe difficulties and appointing administrators – and thousands of jobs being put at risk – it is now time for the Government to start the rating revaluation or face potentially dire consequences on the High Street.”

The latest casualty is Mostyn's, the curtains and soft-furnishings retailer and manufacturer, which filed an intention to appoint administrators recently. Mostyn's, based in Christchurch, Dorset, has about 25 stores and 130 employees. It was only bought out of administration in September last year.

Its financial difficulties follow those of Dwell, the furniture retailer which employs over 900 staff, which called in Duff & Phelps' John Whitfield and Philip Duffy as joint administrators after closing all 23 of its stores.
Other retailers who have said they intend to appoint administrators in recent days include Internacionale, the Glasgow-based clothing retailer which has 150 stores; Ark, a 17-store fashion retailer owned by Rett Retail; and Modelzone, a major stockist of Hornby toys with 47 stores.

Helen Dickinson, director general of the British Retail Consortium (BRC), the industry trade association, has called for the government to speed up action to tackle high costs for shop-based retailers, particularly business rates, as businesses struggled to survive.

Vince Cable, the business secretary, has promised to review the operating climate for retailers once the UK economy has stabilised, but Mrs Dickinson said this review should and could be urgently brought forward.

She said the Future High Streets Forum, an industry-led group which is advising the Government on policies to support the regeneration of town centres, could be used to lead a rates review.
The BRC wants a new system to calculate rate rises, which are currently guided by the retail price index of inflation in September. It has called for a one-off freeze in business rates this year rather than the planned 2.6% rise.

Retailers saw business rates rise 4.6% in 2011 and 5.6% in 2012 amid tough trading conditions on the high street. The economic downturn has combined with a huge switch in shopper behaviour towards buying goods online to bring down many well-known high street names.

The latest tranche of business difficulties follow the collapse of HMV, Blockbuster and Jessops at the beginning of the year. The brand names and some stores were bought out by new owners, saving a significant number of jobs, but hundreds more outlets were closed.

Posted by The Editor (wantspacegotspace) on 19th August 2013 (updated 02/09/2013)

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