Mike Ashley’s high end fashion chain Flannels has been handed £125,000 in business rates “help” by a local council amid fears that a former pub and nightclub it bought back in 2016 would be left derelict.
Doncaster Council agreed the funding to Flannels’ over a “derelict” site at Priory Walk, formerly a Walkabout bar, despite Flannels’ turning over £62m last year making a £5m profit. Last year, the council sold off several high-profile buildings – including two former community centres – to raise more than £800,000.
Renovation had already begun on the former pub and nightclub but work was halted by Ashley’s head of property acquisition rendering the premises unusable and not liable to pay any business rates.
Council documents said: “If we are unable to support this investment the unit will remain empty and the area, in general, will continue to look undesirable to new investors.” After accepting the offer, Flannels, which sells Gucci, Jimmy Choo and Moncler, opened in October.”
The news comes after Ashley criticised the chancellor’s plan to help the high street telling MPs last week that councils should be able to offer five year holidays on business rates.
Section 47 of the Local Government Finance Act 1988 was amended by the Localism Act 2011 to give council’s the power to give a discretionary discount on business rates. A discount may be awarded to any property or business of a council’s choosing.
According to ratings advisory, Altus Group, for 2017/18, councils across England awarded discounts to just 2,414 premises of the 1.9 million properties liable for rates. Those discounts totalled £21m despite £23.9bn of rates income. Doncaster, last year, chose not to use those powers and awarded nothing.
Council bosses said the decision to give Ashley’s chain £125,000 in rates ‘help’ might “risk setting a precedent for further retail applications and challenges if they are not supported.”
Robert Hayton, who is head of UK business rates at Altus Group, said: “In certain areas, with unique challenges, or where there is a loss of an anchor store, it may require councils taking a cut in business rates from businesses that they believe will help become or continue to be destinations and deliver footfall.”