Debenhams threatens to keep Welsh stores shut unless Assembly reverse rates decision

Debenhams has warned the Welsh finance minister it will be forced to shut its major shops in Wales unless the government reverses a decision on business rates relief. Read more: Debenhams threatens to keep Welsh stores shut unless Assembly reverse rates decision

Debenhams threatens to keep Welsh stores shut unless Assembly reverse rates decision

Debenhams has warned the Welsh finance minister it will be forced to shut its major shops in Wales unless the government reverses a decision on business rates relief.

Chancellor Rishi Sunak has granted a rates holiday to all retail, leisure and hospitality firms for a year.

Wales initially said it would match these plans but then changed the threshold for those eligible.

It said the change means business rates will be used for grants to small firms.

The letter written by Debenhams’ chairman to the Welsh government states that the move threatens the viability of its biggest stores in Wales in Cardiff, Swansea, Newport, Wrexham and Llandudno.

Wales decided not to extend relief to properties with a rateable value of £500,000 and above.

Debenhams’ chairman Mark Gifford tells Welsh Finance Minister Rebecca Evans: “It is deeply regrettable that, by electing to take a different approach to that taken elsewhere in the UK, you have made it economically unviable for us to continue trading the majority of our Welsh business.

“You have failed to understand the situation, where Debenhams Retail Limited is in administration and will cease to pay business rates unless it chooses to reopen its stores in Wales.

“It will be unable to reopen its stores unless you reverse your decision.”

A Welsh Government spokesperson said: “We decided to limit the Non-Domestic Rates (NDR) Relief for the hospitality, retail and leisure sector announced to exclude the small proportion of properties with a rateable value of over £500,000.

“This affects fewer than 200 properties across Wales but releases more than £100 million towards our Economic Resilience Fund – enough to support more than 2,000 businesses with grants of £50,000.

According to real estate services firm Altus Group, Debenhams has business rates liabilities in Wales of £2.35m for the current financial year.

The biggest bill is for its Cardiff store at more than £1.1m.

Meanwhile, it has emerged that four more Debenhams stores will not reopen post-lockdown, after the business failed to agree deals with landlords.

The shops are in Southampton, Swindon, Kidderminster and Borehamwood. They are in addition to seven outlets Debenhams already said will remain closed.

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Debenhams threatens to keep Welsh stores shut unless Assembly reverse rates decision

Source : Business Matters More   

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Landlords dreading ‘government sanctioned’ mass non-payment of rent

Businesses have been given “a licence not to pay rent” after the government banned landlords from taking action against tenants who don’t pay as a result of the coronavirus. Read more: Landlords dreading ‘government sanctioned’ mass non-payment of rent

Landlords dreading ‘government sanctioned’ mass non-payment of rent

Businesses have been given “a licence not to pay rent” after the government banned landlords from taking action against tenants who don’t pay as a result of the coronavirus.

New legislation will temporarily stop landlords from issuing statutory demands and winding-up orders against tenants struggling to pay bills because of the impact of Covid-19.

It will be enforced until the end of June but could be extended, the government said. Further legislation to prevent landlords taking action to recover rent unless they are owed 90 days of unpaid rent is also being introduced.

Alok Sharma, the business secretary, said that the measures would ensure “the minority of landlords using aggressive tactics to collect their rents can no longer do so while the Covid-19 emergency continues”.

The action was welcomed by retailers and hospitality groups. Helen Dickinson, chief executive of the British Retail Consortium, said it “protects firms who — during these extraordinary times — are unable to meet their rent obligations”.

However, landlords fear the measures will open the floodgates to a mass non-payment of rent by businesses.

Adam Coffer, 41, managing director at EPF, a leisure landlord with more than 30 tenants, said: “We are sympathetic to terrible challenges our tenants face. But taking it to the point of not being able to recover deferred rent at all, even at concession or discounted rates, would be like throwing a grenade into every UK property owner’s businesses.”

Danielle Drummond-Brassington, head of the real estate disputes practice at the law firm CMS, said: “This proposal seems very one sided and is effectively a licence not to pay rent.”

Only a third of retailers paid their rents due for the current quarter in full and on time, according to Knight Frank.

Vivienne King, chief executive of Revo, which represents retail property landlords, said: “A moratorium on winding-up petitions and statutory demands removes the incentive of last resort for property owners.”

Read more:
Landlords dreading ‘government sanctioned’ mass non-payment of rent

Source : Business Matters More   

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