Frasers Group, the retailer controlled by Mike Ashley and formerly known as Sports Direct, says it expects to book a £100m charge as a result of continuing coronavirus lockdowns that have shuttered its stores.
The company told investors on Tuesday the non-cash charge would account for the loss of value in its assets, including property, during the current COVID-19 lockdowns UK-wide.
Its stores, which include Sports Direct and House of Fraser, are deemed non-essential retail and would expect to remain closed through until 12 April, at the earliest, under PM Boris Johnson's roadmap out of lockdown revealed on Monday.
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Like many of its competitors, Frasers continues to rely on online trading as the high street reels from the effects of restrictions that helped account for the loss of two big names and thousands of jobs in recent months.
Sir Philip Green's Arcadia, which includes Topshop, and Debenhams are to disappear from town centres in the wake of their pre-Christmas collapse.
Debenhams, along with Arcadia's brands, have been snapped up this year and shared among established online players ASOS and Boohoo who will trade them online-only.
Frasers said of its looming charge: "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 100 million pounds."
Shares in Frasers, down 6.5% over the last year, were 4% up in early deals.
Laura Hoy, equity analyst at Hargreaves Lansdown, said of the update: "With the country's spirits lifted following the unveiling of the government's plan to exit lockdown, it's easy to forget that not everyone is celebrating.
"While Frasers' Sports Direct business has weathered the lockdown relatively well, the group's other high street names like House of Fraser and Jack Wills have been hurt by a lack of demand for occasion wear and work clothing.
"Frasers is concerned about 'systemic changes to consumer behaviour', and rightly so.
"Social gatherings, and even the typical workday, could look a lot different after more than a year of disruption, - not to mention consumers' increased preference for e-commerce over high-street shops.
"Frasers isn't facing a cash crunch for the time-being, but it will struggle to do much more than stay afloat in the near-term. Frasers' warning is likely a signpost for the sector as a whole: more pain ahead."
