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“The biggest risk to retail now is business rates coming back”

Having been delighted to see his portfolio of stores re-open first thing on Monday morning – Ryman, Robert Dyas and Boux Avenue – retail tycoon Theo Paphitis was interviewed by Sky News during an evening bulletin, where he was happy to share his views on his shops re-opening, the future of high street retail, and why business rates need to be abolished.

“With many of my stores closed for seven months – over half the year – I’ve been with my colleagues today, and it’s been absolutely brilliant to see the smiles on their faces and see them back serving customers,” he told Sky News’ anchor Dermot Murnaghan. “It was also wonderful to see the queues outside the door – all very orderly and in good spirit – and to see people shopping with a purpose again.”

With everyone talking about getting back to normal, Theo was asked that, in terms of the charges and overheads that his stores would face, did he want to go back to normal, or did he want help from the government?

“I think the Chancellor has done a pretty good job so far in the pandemic,” pointed out Theo. “It’s unprecedented, and you can’t accuse the government of being mean in the way that they have opened up the Treasury purse. But the important thing is not to waste all the money that has been invested in keeping the economy, somewhat mothballed, ready to spring into action again once we lift total restrictions. What we need is to get an advantage and hit the ground running.”

As he explained: “The important thing is to realise some of the archaic, horrendously unfair taxes that exist for high street stores, namely business rates. Or what I call the ‘business destroyer’. It is the most ridiculous tax and it is the most unfair. Currently, the biggest risk to retail now is business rates coming back.”

Asked about online trading, and whether he would be staying with it, Theo pointed out that it’s a big part of his business now. “The genie is well and truly out of the bottle,” he told Sky News. “Not everyone will go back to what they did before. People will stick with some of their online activities, but they will still enjoy the retail experience. What we need to ensure is that there is fairness with taxaxtion between the two.”

As for Monday morning’s initial excitement at non-essential shops re-opening, Theo was asked whether he was concerned that it might peter out. “Far from it!” he exclaimed. “The wonderful thing is that we now have a vaccine, and while there might be different variants that we may need to worry about, we’re far more prepared in vaccinating ourselves against those. But never say never in life. However, I truly believe that there will not be another lockdown.”

If sales do stay online, or if business rates relief doesn’t happen, Theo was asked if he would have to close some of his stores.  “Sadly, that would be the outcome,” he concurred. “The government are fully aware of this, so I think it would be a big mistake for them not to deal with the issue of business rates.”

As for having a contingency business plan, he said that most auditors who have signed off company accounts for this year have built in the possibility of three months of lockdown in their stress testing. “So most businesses have been stress tested, and we can all probably hold on for a bit longer if that happens. But a lengthy close down, or the return of business rates, wouldn’t be good,” he added.

Despite the recent failures of big multiples such as Debenhams and Arcadia, Theo emphasised that he believes that there is still a future for the high street. Concluding, he told Sky News: “There will be opportunities for businesses to be restructured and for them to be successful again.”


Top: Retail tycoon Theo Paphitis was interviewed on Sky News on Monday evening.

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