Apr 9, 2021
Download the article
Click here to print
Text size
aA+ aA-

Frasers downgrades asset values on fears of third wave

Apr 9, 2021

Frasers Group issued a gloomy outlook on Friday warning that further Covid-19 restrictions could mean it taking a hit of more than £200 million as far as the valuation of its assets are concerned. That's more than double the estimate it issued just over six weeks ago.

Sports Direct

The company, which owns Sports Direct, House of Fraser, Jack Wills, Flannels and more, said that the messaging coming out of the government at the moment seems to suggest that further restrictions are “almost certain”.

In a stock exchange filing, it said: “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-advisor 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 judgements from other leading retailers.”

The result of this is that it “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 £200 million. Any such impairment would be in addition to impairments included in the half year results announced on 10 December 2020, and is expected to be included, subject to audit, with the company's results for the financial year ending April 2021”.

Frasers is currently preparing to open a large number of its shops on Monday as much of non-essential retail in the UK is finally being allowed to open its doors.

Copyright © 2022 FashionNetwork.com All rights reserved.