Mike Ashley has called for a new tax on online retailers to help revive ailing town centres. The Sports Direct owner told MPs that the “internet is killing the High Street”.
His answer is taxing all retailers that make more than 20% of their turnover online – and not just online-only operators.
Mr Ashley said a tax would hit his own £400m online operation, but give retailers a reason to keep stores open.
“I want to make it crystal clear: the mainstream High Street as we think about it today – not the Oxford Streets and the Westfields – are already dead. They can’t survive,” he told the Housing and Local Government Committee.
“We have to realise the High Street won’t make 2030 – it’s not going to be there unless you do something really radical and grab the bulls by the horns. It won’t be there.”
All parties, including landlords and the government bodies responsible for setting business rates, had to play a part in helping to save the High Street, Mr Ashley told the MPs.
Melanie Leech, chief executive of the British Property Federation, said taxing online retail revenues was not an alternative to “urgent support in the form of fundamental business rates reform”.
Revo, which represents landlords, retailers and local authorities in the retail property sector, said it had been calling for a fairer tax system.
Ed Cooke, Revo chief executive, said: “It is hard to disagree with Mike Ashley’s comments that a massive electric shock is needed to revive high streets that are flatlining.”
Earlier this year, Sports Direct bought House of Fraser for £90m after the department store chain collapsed into administration. Many such stores were stuck with “prehistoric rents” set before the rise of online shopping, Mr Ashley said. That meant landlords “have to take their share of the pain”, he argued.
In combative exchanges with MPs, the “tracksuit tycoon” said some buildings now had more value for purposes other than retailing.
However, most landlords wanted to “sit down and work something out”, Mr Ashley said, adding: “I’m not Father Christmas – I try and be fair and I try and be balanced”.
Given the obstacles facing the retail sector, managing to keep 80% of House of Fraser stores open would be a “god-like performance”, he said.
That meant he could not guarantee all House of Fraser workers would keep their jobs. “It doesn’t make sense… the High Street has to change what it offers the consumers.”
Mr Ashley has vowed to make the chain the “Harrods of the High Street” and take it more upmarket.
He also hinted a long-suggested tie-up between Debenhams, in which Sports Direct has a 29.7% stake, and House of Fraser could still be on the cards: “I told them to work together. They should work together.”