Yahoo Finance Mike Ashley's Frasers Group warns COVID third wave will cost it £200m
Retail tycoon, Mike Ashley's Fraser Group (FRAS.L) has warned it could take a hit of over £200m ($274m) amid expectations that a third coronavirus wave will lead to "further" measures.
In an announcement on Friday, the company said it believes further restrictions are "almost certain" saying a write down against freehold values and other non-cash impairments will be required.
The amount is double previous estimates. In February, Ashley estimated that the impact of the coronavirus pandemic would lead to a £100m write down in the value of its properties and other assets.
"Frasers Group is continuing to assess the COVID-19 potential impact on asset values" the company said.
It added that warnings from its advisers and the UK government regarding a potential "third wave" and a return to normality being "some way off" had prompted it to double the company's assessment of the COVID crisis.
Frasers is planning to reopen most of its estate from Monday 12 April as non-essential retailers are allowed to welcome back customers, in the second stage of the roadmap out of lockdown.
Industry experts have said that the company's announcement stands out from an otherwise "cheerful retail crowd."
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown said: "While other retailers appear to be riding a cheerful wave ahead of the re-opening of the high street, Frasers Group appears to be the party pooper, sounding a cautionary note about getting carried away too soon."
Shares in the company were up 0.2% on Friday in mid-morning trade in London.
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The group includes House of Fraser, Game Digital, Jack Wills, Evans Cycles.
So far, only Evans Cycles bike chain, which is classed as an essential retailer, has remained open throughout the high street lockdowns.
At least 14 of House of Fraser’s original 59 department stores have shut since the chain was bought out of administration by Frasers in 2018.
The company has also been eyeing potential takeover opportunities throughout the COVID-19 crisis, showing interest in the collapsed Debenhams and Peacocks brands.
The coronavirus pandemic saw unprecedented numbers of high street job losses and store closures since the first national lockdown in March last year when shops were forced to close.
Figures by the Centre for Retail Research show that 188,685 retail jobs have vanished between the onset of the first national lockdown in the UK on 23 March 2020 and 31 March this year.
So far, the COVID crisis has seen 15,153 store closures in shopping destinations across Great Britain.
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