Frasers Group confirms interest in Arcadia brands

Mike Ashley's Frasers Group has confirmed it is considering buying Arcadia brands such as Topshop.

"We do tend to look at almost everything on the High Street," Frasers' chief financial officer Chris Wootton told the BBC's Today programme.

He also said Frasers Group was still in discussions around potentially buying Debenhams.

The Sports Direct owner has reported a rise in profits, despite a fall in sales.

The company said this was partly due to business rates relief, particularly for its House of Fraser stores.

• Topshop owner Arcadia goes into administration

• Buyers to 'pick over carcass' of Topshop firm

• Mike Ashley in talks to rescue Debenhams

The once-mighty Arcadia retail empire, which also includes Burton and Dorothy Perkins, entered administration on 30 November, putting 13,000 jobs at risk.

Mr Wootton said it was still the case that Frasers Group is interested in Arcadia brands "but the process has only just started so there's a long way to go as to ascertain what - if anything - we look at with that".

Frasers Group reported a 7% fall in sales for the six months to 25 October because of temporary store closures during the coronavirus lockdown.

However, pre-tax profits for the period were £106m, up from £90m last year.

The group said its growing online business and the opening of new Flannels stores also helped push up profits.

The latest results do not include the period when England entered a second national lockdown in November, but Mr Wootton said sales had been strong since stores reopened.

Mike Ashley has rescued other struggling businesses including House of Fraser and Evans Cycles

Frasers Group chairman David Daly called the results "pleasing" given that nearly all of its stores were closed until mid-June.

"In an industry sector blighted by the decline of the High Street we are really proud of our performance," he said.

'Huge task'

Last week, Debenhams said that its 124 stores would close - and 12,000 workers would lose their jobs - unless a last-ditch buyer could be found.

Both Debenhams and Arcadia's brands had been struggling before the pandemic, but were hit hard by the loss in sales caused by lockdowns.

Given the current retail climate, Frasers' strong financial results are "no mean feat" said Julie Palmer, partner at financial consultants Begbies Traynor.

"The company has undoubtedly benefitted from the trend towards consumers exercising more during lockdown periods, and the growing appetite for athleisure and loungewear," she said.

"However, after Mike Ashley confirmed this week that the group was in talks with the administrators of Debenhams, investors will be mindful of the huge task before him to turn around the ailing business should the transaction succeed."

Frasers Group owns 491 Sports Direct stores and 46 Flannels outlets across the UK.