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.”
“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.