Embattled Retailer Asks for Relief as Creditors Vote
- Debenhams plans to ask for a 50% reduction in business rates bills
- Creditors to vote on proposal on Thursday (9 May)
- Small landlords expected to be worst affected
- Business rates bill for Debenhams’ 166 stores was over £71m in 2018/9
- Downward phasing led to paying considerably more in business rates
- Colliers International criticizes the current system as ‘ludicrous’
- Government urged to remove downward transition to save jobs
Debenhams, the embattled department store, is reportedly planning to request a 50% reduction in its business rates bills from 30 local authorities as part of its proposed Company Voluntary Arrangement (CVA). The proposal will be voted on by creditors on May 9th. Small landlords are expected to bear the brunt of the impact, as only a quarter of the affected properties are owned by major companies and pension funds. John Webber, head of business rates at Colliers International, criticized the current system, calling it ‘ludicrous’ and comparing the request to begging from those who have already taken advantage. He added that the high business rates tax is a significant factor in Debenhams’ CVA process. In 2018/9, Debenhams’ 166 stores had a business rates bill of over £71m, with many paying more due to downward phasing from the 2017 Rating Revaluation. Colliers analyzed 46 impacted stores and found they would pay £6.4m more in rates than necessary over three years. Webber urged the government to remove downward transition to save jobs.
Factuality Level: 8
Factuality Justification: The article provides accurate information about Debenhams’ plan to ask for a reduction in its business rates bill and includes expert opinions on the matter. It also explains the context behind the proposal and potential consequences of the decision.
Noise Level: 4
Noise Justification: The article provides relevant information about Debenhams’ plan to ask for a reduction in its business rates bill as part of its CVA proposal and includes expert opinions on the matter. However, it could benefit from more data or examples to support the claims made by John Webber.
Financial Relevance: Yes
Financial Markets Impacted: Debenhams’ creditors and local authorities
Financial Rating Justification: The article discusses Debenhams’ proposal to reduce its business rates bill, which affects its financial situation and potentially impacts the finances of its creditors and local authorities.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: Minor
Extreme Rating Justification: There is no extreme event mentioned in the article, and the situation with Debenhams’ business rates and CVA proposal does not meet the criteria for an extreme event as it is a financial crisis rather than a catastrophic or major disaster.
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