Mike Ashley, the billionaire chief executive officer of Sports Direct International Plc, told Parliament that he’s neither God nor Father Christmas. But he does have an idea to save British retailers.
In a sometimes heated exchange with the Housing, Communities and Local Government Committee, Ashley suggested a new tax that would favor bricks-and-mortar stores. The entrepreneur, who’s known for his partying lifestyle, previously faced parliamentary scrutiny for Sports Direct’s labor conditions. He acquired troubled department-store chain House of Fraser this year and plans to close some of its sites.
The new levy would apply to any business that makes more than 20 percent of its sales online. That would encourage retailers to keep stores going and eventually open more. Sales initiated online but completed when customers come in to pick up the items would be exempt, as they still drive foot traffic.
“I’m not this crazy capitalist everybody thinks I am,” Ashley said. “Everybody has to come together and look at it on this kind of scale.”
Under his plan, landlords would need to reduce rents by 25 percent, local councils would have to waive property taxes known as business rates, and retailers would have to reduce dividend payments by 25 percent.
Online merchants such as Amazon.com Inc or Asos Plc would have to pay up. Without this kind of radical action, most British retailers won’t exist by 2030, Ashley told the committee.
Most U.K. downtown shopping districts have “already died, in the bottom of the swimming pool,” Ashley said. “The only thing you can do is give them a massive electric shock.”