Frasers Group: Mike Ashley’s firm issues profit warning amid ‘significant disruption’ caused by coronavirus
Mike Ashley’s Frasers Group has issued a profit warning this morning citing the “significant disruption” to business.
Formerly Sports Direct, the retailer will no longer give guidance in relation to the current financial year.
Due to the coronavirus outbreak, the firm has seen reduced customer footfall to its brands’ stores, which includes House of Fraser, Jack Wills, Flannels and Sports Direct, among others.
As a result, the firm said it “will not achieve the range of guidance of 5 per cent to 15 per cent EBITDA growth” for the year ending 26 April 2020.
The company added that it’s performance throughout the financial year prior to the Covid-19 outbreak had been in line with expectations.
It said it “has a strong management team which can adapt and respond quickly to challenges and changing market conditions.”
Frasers also said it remains “confident” in its “elevation strategy” in the long-term.
However, Ashley and Sir Phillip Green, owner of rival-retailer Arcadia, have written to landlords asking for a 50 per cent rent cut, according to a report in the Guardian.
They have joined a wave of retailers including H&M, New Look and Debenhams in asking landlords for rent holidays or cuts
There has not been any indication as of yet that Frasers Group will have to close any stores.
However, Marks & Spencers warned investors this morning that temporary closures may be necessary.
It also issued a profit warning this morning as coronavirus worsens High Street conditions.