Mike Ashley’s Frasers Group set for ‘upbeat’ update after reopening stores

Mike Ashley’s Frasers Group set for ‘upbeat’ update after reopening stores
Shareholders will be hopeful of a strong recovery message from the group in its trading update on Thursday August 5.

Sports Direct owner Frasers Group is expected to unveil an “upbeat” trading update amid hopes its sales will have rebounded strongly after the reopening of high street stores.

In April, the Mike Ashley-led retail giant was cautious in its outlook despite the reopening of retailers across the UK.

The company warned it could take a £200 million hit from the impact of pandemic restrictions following the third national lockdown.

However, shareholders will be hopeful of a strong recovery message from the group, which also owns House of Fraser and Flannels, when it delivers its full-year trading figures on Thursday August 5.

Frasers Group chief executive officer Mike Ashley (Kirsty O’Connor/PA)

In May, Mr Ashley showed his confidence in the group’s post-Covid future by snapping up £60 million more shares in the company.

The group reports significant online sales through Sports Direct but continues to operate a large and sprawling retail portfolio which will have been significantly impacted by restrictions.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown said: “After a surge of sales in April, clothes shopping appears to have fallen out of fashion again in May and June, according to the ONS which also doesn’t bode too well for the performance of House of Fraser and Flannels, with sales in department stores particularly weak.

“However, football fever should have kept demand more buoyant at Sports Direct, with young sports fans buying kit and equipment to try and follow in the footsteps of their soccer heroes.”

Analysts have also highlighted strong growth in the athleisure sector over the past year amid a jump in fitness activity during the pandemic.

Jonathan Pritchard, analyst at Peel Hunt, said: “I think that the athleisure trend will prove to be something that carries all boats.

“Whether the better trading post-restart is enough to boost the reported full-year 2021 number or just gives them a good start to full-year 2021 remains to be seen but there is no doubt that the trends will continue and Sports Direct, to a lesser degree than JD, will take advantage.

“There remains the ongoing discussion surrounding allocations of cutting edge sports fashion wear from the big brands but on a participation side the rhetoric around Sports direct is likely to be upbeat.”

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