May 1, 2019
Debenhams demands business rate cuts
Debenhams is demanding reductions in business rates alongside cuts to rents as part of its attempt to reduce its store occupancy costs, according to documents seen by the Financial Times. The formal documents prepared ahead of a creditor vote on May 9 split the leases - held by subsidiaries Debenhams Retail and Debenhams Properties - into various categories and asked for rent reductions of up to 50 per cent. Another industry observer said he expected demands for business rate reductions as part of CVAs to increase, because they had become such a significant component of overall occupancy costs. The business rate reduction only lasts for the current tax year, not the five-year duration of the CVA process. Last year, DIY retailer Homebase succeeded in securing reductions of between 25 and 90 per cent in business rates on 70 of its stores, also through a CVA. "This isn't the first time a retailer has asked for a business rates reduction to support their restructuring, and it won't be the last," said Ed Cooke, chief executive of Revo, an organisation that represents landlords, local authorities and retailers.
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