Department store chain Debenhams is gearing up for a battle over a proposed business rates hike on one of its stores that it says could decide the future of the whole group.

The retailer has appealed to a tribunal against the 12% hike in its business rates bill to £1.1m on one of its stores in Swansea, Wales. As a result, it said it was “kicking off a nationwide fight in local tribunals for its business rates liability to be rebased to reflect reality”.

Given the problems battering the UK high street pre-coronavirus, and the catastrophic effects on trading from the lockdown and continued slow footfall growth, Debenhams said a failure to reverse “unsustainable” rates increases put more of its stores and staff’s jobs at risk. 

“Unless more realistic assessments are agreed, Debenhams is likely to have to close more stores, with the result that thousands more workers will lose their jobs,” it said. “Since lockdown, the network has already shrunk from 142 to 124 stores.”

The department store group, which is currently in administration and has already cut 6,500 jobs during the pandemic, said once the government’s 12-month business rates holiday lifts it faces a total UK rates bill of around £60m.

A Debenhams spokesman said: “The Swansea hearing is a vital test case, with serious implications for jobs, both locally and across the UK. The outcome will go a long way to defining the future of every one of our stores. 

“Currently, we have a completely unsustainable situation where rents are going down, but our rates bill is going up. We understand the pressures on the Treasury but, unless common sense prevails, the end result of rates hikes will be further store closures and more job losses. 

“We are fighting hard to save every store – and every job – we can and the outcome of the Swansea tribunal will go a long way to determining the ultimate size of the business.”