Heatons chief admits plans for Belfast store shelved due to high rates
The head of an Irish retail chain, in which Newcastle United boss Mike Ashley has a majority share, has said high rates have scuppered his plans to open in Belfast city centre.
John O'Neill, the Belfast-born chief executive of Heatons, said he had considered sites in Belfast city centre but that rates were too high.
He spoke as the company's accounts for the year to the end of April revealed plans for expansion after the quadrupling of pre-tax profits to £2.3m.
It recently opened a store in Londonderry's Richmond Centre, adding to 12 others in the province in locations like Newtownabbey, Cookstown and Omagh.
Mr O'Neill said: "We have four or five sites under negotiation but Belfast is difficult at the moment because of rates.
"There are amazingly good rental deals in Belfast city centre at the moment but rates are majorly out of proportion and are actively discouraging us and other retailers from setting up. That's a big, big problem.
"When it comes to Donegall Place, rental deals with landlords and banks are reflecting where the marketplace is but local authorities aren't doing the same with rates." Business rates in Northern Ireland are to be revalued in two years' time – current values date back to 2003.
Value for money department store Heatons, which also has Sports World stores in its outlets, has 52 stores across Ireland. It employs 431 people in retail in Northern Ireland, 11 in administration and another 100 in its distribution centre in Antrim. "All distribution for Ireland is run from Antrim," Mr O'Neill said.
The accounts for Northern Ireland – it does not publish accounts for the Republic – revealed a quadrupling in pre-tax profits from £537,455 in 2012 to £2.3m.
The company's motto is "value for money", a philosophy emphasised in the accounts and directors' report. "The company is exposed to the economic risk of a countrywide slowdown in growth," it said. "The company continues to offer quality products at very competitive prices to protect itself in this regards."
The directors – Mark and Hugh Heaton, sons of founder Hubert, along with Mr O'Neill and Mr Ashley – said they would not be paying a dividend.
Mr O'Neill said the company had a good relationship with its banker, Ulster Bank.
"They have been extremely supportive and finance has been available whenever necessary. The expansion in the business would not have happened without it," he said.