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UK’s Frasers flags possible store closures after ‘near worthless’ govt support

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UK's Frasers flags possible store closures after 'near worthless' govt support 1

(Reuters) – Mike Ashely-owned Frasers Group on Friday warned of possible store closures after it reviews its estate, as the company said government aid for the coronavirus-battered retail sector was not good enough.

Britain will extend a year-long business rates exemption for retail, hospitality and leisure businesses to the end of June, finance minister Rishi Sunak said on Wednesday as part of his annual budget statement.

“For the remaining nine months of the (financial) year, business rates will still be discounted by two-thirds, up to a value of 2 million pounds for closed businesses, with a lower cap for those who have been able to stay open,” Sunak told parliament.

“The 2 million pound rates cap … from July 2021 to March 2022, makes it a near worthless support package for large retailers,” Frasers said in a statement.

The company, earlier known as Sports Direct, said the rate cap would make it “nearly impossible” to take on former sites of collapsed department store chain, Debenhams, with the inherent jobs created.

Online fashion retailer Boohoo had earlier bought the Debenhams brand for 55 million pounds, but not its stores.

“Like many retailers, it’s clear Frasers had hoped the Chancellor would use the budget to finally address the much-discussed inequalities between online and brick-and-mortar stores, but once again that can was kicked down the road,” AJ Bell analyst Danni Hewson said.

(Reporting by Tanishaa Nadkar in Bengaluru; Editing by Ramakrishnan M.)

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