Business taxes are holding us back, says Frasers boss Michael Murray

Frasers Group boss Michael Murray warned that “business taxes are holding us back” and called on Labor to reduce the tax burden.

Chief executive and son-in-law Mike Ashley made the comments as he announced a “breakout year” for the Sports Direct owner.

Business taxes are a local tax paid based on the value of a commercial property, meaning stores pay a premium compared to online giants like Amazon.

Many traditional retailers have urged the government to deliver on its stated promises to reform this broken system.

“We hope the new government will consider cutting business rates which are holding us back,” Murray said.

He added: “They say they are committed to the business so we hope they will help retailers. It will be a battle of the strongest and we are confident we are in a good position to continue growing.”

Murray took over in May 2022 after his father-in-law stepped back from the business he created in 1982. Shares have since risen by a third, from 670p to 897p yesterday.

Her demands echo those of other well-known companies such as Marks & Spencer, Next and Kingfisher, which owns B&Q. Rachel Reeves wants to become the most “pro-growth” chancellor in the UK’s history.

And Labour’s manifesto promised to “replace the corporate tax system, so we can raise the same revenues but in a fairer way”.

He added that the system “discourages investment, creates uncertainty and places an undue burden on our main streets.”

Murray also criticised Labour’s promise to ban zero-hours contracts, saying some employees “would be upset”.

He told Sky News: “We’ve done surveys and the zero-hours contract has had very positive feedback, and that’s because it gives people the flexibility to decide when they want to work and when they don’t.”

Despite the pressure on business, Frasers has taken a positive step and its shares have risen 20 per cent in a year.

It is considered a High Street flagship due to its huge catalogue of brands, including House of Fraser, Flannels, Game, Jack Wills, Agent Provocateur and Sofa.

It also owns stakes in other retailers including Hugo Boss, Currys, Asos and Boohoo.

Profits rose to £545m in the year to April 28, up 13 per cent on the previous year, boosted by strong results from Sports Direct.

But this was offset by a poorer performance at its gaming retailer Game, planned closures of House of Fraser stores and a tough luxury market.

“While sport has gained momentum, our premium and luxury division has experienced the weakening of the global luxury market felt by most high-end retailers and brands,” Murray said.

Overall, annual sales fell 0.9 percent to £5.5 billion.

Clive Black, equity analyst at Shore Capital, said: “It’s a distinctive business with a rich history of growth by any measure and while it’s not everyone’s cup of tea for a variety of reasons, we expect growth to continue and for Frasers to become more, not less, relevant in the future.”

Frasers bought ailing high-end fashion retailer Matches for £52m in December but had to put it into administration a few months later.

This resulted in a £12.5m loss in its annual profits. Last month it bought THG’s luxury goods websites.