Ashley retail group warns of £200m Covid hit
Newcastle United owner Mike Ashley’s retail group has warned it could take a hit in excess of £200m due to the Covid-19 restrictions – double its previous estimate in February.
Frasers Group said it believes further restrictions are "almost certain", believing a writedown against freehold values and other non-cash impairments will be required.
In an announcement to the London Stock Exchange, the firm 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 Covid19-affected experiences, estimates and judgments from other leading retailers."
Frasers is planning to reopen vast swathes of its estate from Monday, as non-essential retailers are allowed to welcome back customers.
The group, controlled by Mr Ashley, includes House of Fraser, Game Digital, Evans Cycles – which was able to remain open as an essential retailer – and Sports Direct.
Bosses at the group have been critical of the extension by Chancellor Rishi Sunak to the business rates holiday and the restrictions it places on how much can be saved for big chains like Frasers.
Mr Ashley's firm has also been eyeing up potential takeover opportunities throughout the Covid-19 crisis, and has shown interest in the collapsed Debenhams and Peacocks brands, although administrators have found that Frasers' offers have tended to be far too low to accept.