// Frasers Group to invest £100m on online expansion
// The retail empire will open stores in shopping centres
Mike Ashley’s Frasers Group is reportedly set to invest £100 million on online expansion and open stores in shopping centres as its high street rivals continue to struggle amid the Covid-19 crisis.
The retail empire – which owns businesses including Sports Direct, House of Fraser and Flannels – aims to bolster online sales and acquire property for high-end shops following a host of collapses, The Telegraph reported.
Frasers Group said it will also close further stores if the company is unable to turn a profit.
READ MORE:
- Frasers Group blames Brexit & Covid-19 on profit dip as it mulls shop closures
- Frasers Group chair “accidentally” buys shares during closed period
The group’s finance boss Chris Wootton said the company is still “very much a bricks-and-clicks business, not a clicks-and-bricks business”.
But he said that shifting to online has not come as a result of the pandemic, which has led to a number of store closures due to changing consumer habits.
Frasers Group is currently looking at more leasehold sites it could rent in shopping centres.
It would use the sites for Flannels and more Sports Direct shops, based on a higher-end concept it is testing at a £15 million, 90,000sq ft site in Leicester that will also include an e-sports arena linked to newly-acquired Game.
Meanwhile, Wootton warned that more stores closures are likely – particularly at House of Fraser, which it bought for £90 million and where rent charges still remain high.
He added that “people will sadly lose their jobs” if business rates are “not made more appropriate”.
On Thursday, Frasers Group recorded a pre-tax profit decline of 19.9 per cent to £143.5 million for the year ending April 26, while underlying pre-tax profits dropped 18.1 per cent to £117.4 million.
Ashley blamed the drop in profits on Brexit and the coronavirus pandemic.
Frasers Group’s delayed full year trading update came days after chairman David Daly “accidentally” breached City rules by purchasing company stock in the run-up to the results.
Daly bought 3912 shares worth more than £11,000 on Monday, but sold them within 15 minutes and donated the profits on the sale to charity.
Click here to sign up to Retail Gazette‘s free daily email newsletter
