Mike Ashley’s retail empire has warned it won’t reach profit targets for the year as the coronavirus outbreak bites into his finances.
Frasers Group, the firm owned by the billionaire entrepreneur and Newcastle United owner, has issued a statement, saying the group has been closely monitoring the potential impact of COVID-19 across its UK and international businesses.
And the statement suggests it plans to keep its portfolio of shops - which includes House of Fraser department stores, Flannels and Sports Direct amongst others - open throughout the crisis, with the statement not mentioning plans for temporary closures at present.
The statement said: “Whilst it is too early to estimate what the full impact from COVID-19 will be on the Company's performance for the current financial year ending 26 April 2020, and future periods, the Board expects that COVID-19 will cause significant disruption to its business, including reducing customer footfall, and therefore expects that Frasers Group will not achieve the range of guidance of 5 to 15% Ebitda growth previously given for the financial year ending 26 April 2020.
“Accordingly, and given the ongoing uncertainty, the Company is no longer giving formal guidance in relation to the financial year 2020.
“Frasers Group's year-to-date performance had been in-line with expectations prior to COVID-19.
“The Company has a strong management team which can adapt and respond quickly to challenges and changing market conditions.
“Over the longer term, the Board remains confident in focussing on the Company's elevation strategy.”
Meanwhile, it is understood Mr Ashley and Sir Philip Green, owner of Arcadia Group, has asked landlords for rent cuts of up to 50% in a bid to cut costs.
They have joined retailers including H&M, New Look and Debenhams in asking landlords for rent holidays or cuts before the quarterly payment day arrives next week.
