Ashley’s Frasers faces new £100m hit amid crisis

MIKE Ashley’s Frasers Group has said it is facing a hit in excess of

£100 million because of coronavirus restrictions on non-essential retailers reopening stores lasting into April, as it flagged the impact of length of lockdown and “potential systemic changes to consumer behaviour”.

It comes after Prime Minister Boris Johnson announced his road map to reopening the economy on Monday, including plans that stores, including Mr Ashley’s portfolio of House of Fraser, Sports Direct and Game Digital, could welcome back customers by the spring.

However, the company said the continued shutdown is likely to hit its accounts, with impairments to freehold properties, other property, plant and equipment and right of use assets.

In a statement to the stock exchange, the company said: “Given the length of this current lockdown, potential systemic changes to consumer behaviour, and the risk of further restrictions in future, we believe this non-cash impairment could be in excess of £100m.

“Any such impairment would be in addition to impairments included in the half year results announced on December 10, 2020 and is expected to be included, subject to audit, with the company’s results for the financial year ending April 2021.”

It comes as Nicola Sturgeon announced a potential April reopening of the economy in Scotland on Tuesday, including non-essential shops. Mr Ashley’s company, which has stores including Sports Direct and Evans Cycles across Scotland, issued a rare profit warning in December, saying previously published guidance of a 20 per cent to 30% boost in profits this year is unlikely to be achieved. Shares closed at 465.6p, up 1.22%.