Frasers Group warns over £200m COVID-19 hit

Sports Direct Frasers Group

Frasers Group has warned it could take a hit in excess of £200 million due to the ongoing Covid-19 restrictions – double its previous estimate in February.

The Sports Direct, House of Fraser and Flannels owner said it believed further restrictions were “almost certain”, which would require a writedown against freehold values and other non-cash impairments.

In an announcement to the London Stock Exchange, Mike Ashley’s group added: “Frasers Group is continuing to assess the Covid-19 potential impact on asset values.

“In our ongoing assessment we note the continuing Government and Government adviser pronouncements regarding ‘third waves’ and normality being ‘some way off’, meaning further restrictions are in our view almost certain.

“We also note the Covid-19-affected experiences, estimates and judgments from other leading retailers.”

Frasers is planning to reopen vast swathes of its retail estate from Monday, as non-essential retailers in England are allowed to welcome back customers.

The company has been critical of the extension by the Chancellor to the business rates holiday and the restrictions it places on how much can be saved for big chains like Frasers.

Ashley’s firm has also been eyeing up potential takeover opportunities throughout the Covid-19 crisis, showing interest in the collapsed Debenhams and Peacocks brands, though neither led to a deal. It is also said to be circling Topshop’s former flagship store on Oxford Street.