Frasers warns on profits after tier 4 shuts stores

Mike Ashley’s Frasers retail empire has issued a profit warning and said previous guidance of a 20pc to 30pc rise in annual profit was unlikely to be achieved.

The retailer, which owns chains including Sports Direct, House of Fraser, Evans Cycles and Game Digital, had only made the commitment earlier this month.

However, the new tier 4 rules introduced over the weekend have hit the business, with many stores forced to close to customers – although staff in stores are still expected to go in to fulfil click-and-collect orders.

In an update to the stock market, Frasers said the Government’s abrupt decision on non-essential retail in London, the South East and East of England forced virtually all its stores in these areas to close.

“Given this is a peak trading period, and combined with the high likelihood of further rolling lockdowns nationwide over the following months at least, such is the uncertainty of when stores can and cannot open that the board of Frasers Group plc can no longer commit to Frasers Group achieving its publicised guidance … and accordingly is withdrawing its guidance.”

Shares fell more than 8pc in morning trading.

Earlier this month, the company revealed that pre-tax profits rose by 17.6pc to £106.1m at Frasers Group, in the half-year to the end of October.