Mike Ashley’s Frasers Group said on Tuesday that it expects to book a non-cash impairment charge in excess of £100m on its assets as its stores remain closed until mid-April.
After the government announced on Monday that non-essential stores will not reopen until 12 April, the company said it “currently anticipates making material accounting impairments to freehold properties, other property, plant & equipment, and IFRS 16 right of use assets”.
“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,” it added.
This would be in addition to impairments included in the half-year results in December and is expected to be included in results for the year ending April 2021.
Independent retail analyst Nick Bubb said: “It has not said which parts of its rambling empire it is focused on, but although we assume that a big chunk of the asset write-offs will come in House of Fraser, it is not the first time it has had to write down its ill-fated investments on this acquisition and there may well be write-offs in its much-vaunted ‘elevated’ Sports Direct estate with the y/e April final results scheduled for July.”
