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French Connection chief says high rates are 'absurd'


The founder of French Connection has labelled business rates as "absurd" and criticised landlords for their "only way is up" attitude to shop rents.

Stephen Marks is the latest high-profile business leader to attack the rates system, which experts believe is causing retailers to go bust.

The tycoon, who founded French Connection in 1972, told the Daily Telegraph: "Rates are absurd and what do you actually get for them?"

However, he stopped short of calling for rates, which are paid as a tax on commercial property, to be scrapped entirely. "Everybody has to pay tax," he said but he argued that the system had to be fairer.

Northern Ireland's two French Connection stores in Londonderry and Belfast, which were run on a franchise model by Julian Jordan, closed earlier this year, along with concessions selling the label.

The British Retail Consortium has said that the current system is no longer fit for purpose and is pressing for a 2% annual cap on business rate increases, rather than the current benchmark of the Retail Price Index.

Other high-profile retailers including Sir Philip Green, Justin King of Sainsbury's and Ian Cheshire of B&Q owner Kingfisher have also argued for rates to be overhauled to help protect the high street.

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It is believed that business rates are costing the retail industry more than £7bn a year, having increased by £175m in April.

Mr Marks also criticised shop landlords for constant price rises.

"In America, the rent goes up with the cost of living. Here the rent goes up because the last person who's taken the shop has paid some absurd price and therefore that sets the new price. The rentals only go up."

French Connection plans to close 15 stores as part of an overhaul but Mr Marks says he has only been able to close a handful so far because of tough demands by landlords.

He added: "Landlords aren't the easiest people to get out of leases if you've got money in the bank. If you've got five years left on your lease, they want five years of rent to get out of your lease. In some cases where we really had a major loss we've just spent a lot of money to get out of the lease."

He said French Connection was "honourable about paying rent" and would "not be putting shops into administration and then going back to the landlord with a new deal, which many of our competitors have done."