Frasers Group, the owner of retailers including House of Fraser, Sports Direct and Flannels, expects the impact of the Covid-19 pandemic to hit the company twice as hard as initially expected amid concerns of a potential third wave and more temporary store closures.
In a statement this morning (9 April), the Mike Ashley-owned group pointed to government advisor pronouncements regarding third waves and normality being “some way off,” adding this means “further restrictions are in our view almost certain.”
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By GlobalData“We also note the Covid-19 affected experiences, estimates, and judgements from other leading retailers,” the company said.
As a result, Frasers Group currently anticipates making material accounting non-cash impairments to freehold properties, other Property, Plant & Equipment, and IFRS 16 Right of Use Assets which could be in excess of GBP200m. This supersedes an announcement in February in which the group said it expected to take a hit in excess of GBP100m.
Any such impairment would be in addition to impairments included in the half-year results announced on 10 December 2020, and would be included with the company’s results for the financial year ending April 2021.
