Business Rates issue clarified for Debenhams – “The news is positive for Wrexham”

There could be hope that Debenhams in Wrexham could continue to trade, with previously business rates related barriers now no longer an issue.

Debenhams had previously warned that its stores across Wales could close in a row over business rates with the Welsh Government, who had decided to not extend rates relief to to properties with a rateable value of £500,000 and above, saying the lack of a payment holiday for the chain meant more micro, small and medium sized companies have had pandemic support.

Earlier this month we asked Finance Minister Rebecca Evans about the issue, who at the time said there were talks ongoing with the company.

Wrexham’s Member of the Senedd, Lesley Griffiths, received confirmation yesterday that Debenhams in Wrexham will benefit from the Welsh Government’s business rate relief scheme.

Wrexham Debenhams rateable value is exactly £500,000, with the MS confirming the policy states it is “up to and including £500,000” – so the store will qualify for the year-long relief. That means the chain would pay no rates on the store at all for the year.

The ball is now in Debenhams court to see that if the business rates issue was the genuine barrier to secure the future of the store, or a red herring as other stores around the UK have been closed regardless.

Lesley Griffiths MS said: “A number of constituents contacted me about this issue. Local residents were worried about the impact it would have on the town centre and employees were understandably concerned for their livelihoods.”

“After making representations to the Welsh Government and Debenhams, I am pleased this has been clarified and the news is positive for Wrexham. We are living through stressful times so I hope this explanation will at least provide reassurance and comfort to Wrexham Debenhams workforce in particular.”

“Clearly the coronavirus pandemic has had a massive impact on the economy and I will continue to do all I can to support Wrexham’s businesses in the weeks and months ahead.”

Debenhams have confirmed that it’s store in Wrexham has been “saved and is now planned to re-open once government restrictions allow”. The company also cites the support of the local authority.

The company warns however that its stores in Cardiff, Swansea, Newport and Llandudno are still at risk of closure. The rates bill on these four stores is £2.5 million per year, of which Cardiff alone accounts for £1.1 million.

A spokesperson said: “The Welsh Government’s approach unfairly penalises larger retailers which ‘anchor’ shopping centres. Under its proposals, only three retailers (including Debenhams) in Cardiff’s St. David’s Centre, will be required to pay rates.

“Thanks to the support of the local authority there, our store in Wrexham has been saved and is now planned to re-open once government restrictions allow.”

Debenhams Chairman Mark Gifford added: ‘Time is running out to save Debenhams four largest stores in Wales.

“I had a constructive conversation with Rebecca Evans this week but the reality is we need a favourable decision if these stores are to be re-opened by the administrator and precious jobs saved.

“The way the rating system works, and in particular how it relies on outdated rental values, is a UK-wide problem and also reflects the ponderous approach and inaction of the Valuation Office in updating rateable values.

“When combined with the Welsh Government’s stance to make an active choice to penalise large retailers, we continue to ask Ms Evans and her colleagues to provide support to Debenhams to help our colleagues retain their jobs.’

Fewer than 200 properties across Wales are expected to be affected by the Welsh Government’s decision to cap the business rates relief, and the Welsh Government believe the decision will release approximately £117 million to kick-start the economic crisis fund.

All business with a rateable value of over £500,000 were contacted by Business Wales as there were opportunities to apply for discretionary support through the Economic Resilience Fund on a case-by-case basis.