Frasers Group, the parent of Sports Direct in the U.K. and Bob’s Stores and EMS in the U.S., will book a non-cash charge that could exceed £200 million ($274 million) in its 2020/21 results to account for impairment of assets during the latest COVID-19 lockdown.
The retailer said in a statement, “Further to our announcement on February 23 2021, Frasers Group is continuing to assess the COVID-19 potential impact on asset values. In our ongoing assessment, we noted 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 noted the COVID-19 affected experiences, estimates and judgments from other leading retailers.
“Consequently, Frasers Group 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 £200m. This supersedes the previous announcement of February 23, 2021. Any such impairment would be in addition to impairments included in the half-year results announced on December 10 2020 and is expected to be included, subject to audit, with the company’s results for the financial year ending April 2021.”
Photo courtesy Frasers Group
