More House of Fraser closures are “anticipated” with the department store chain’s owner warning of continuing huge job losses on the High Street.
The chain, part of Mike Ashley’s Frasers Group that owns Sport Direct, has closed about 10 of the 59 stores bought out of administration in 2018.
Frasers said it could not say how many would close as rent negotiations were continuing with landlords.
But the group’s finance boss told the BBC the High Street is still suffering.
Frasers Group, whose other brands include Evans Cycles, Jack Wills and Flannels, reported annual pre-tax profits down 20% to £143.5m as lockdown store closures led to “the most challenging year” in its history.
However, group revenue rose 6.9% to £3.96bn helped by acquisitions. The company also said it was seeing “a semblance of normality” returning to trading, although there was a warning that this could be hit by any further lockdowns from a second Covid-19 wave.
More store closures could not be ruled out, it said, as it invests £100m online operations following a shift in consumer buying habits during lockdown.
The group highlighted the continuing threat to House of Fraser outlets. “There are anticipated to be further closures over the coming period, the number of which will depend on the outcome of lease negotiation,” Frasers said.
Chris Wootton, finance director of Frasers Group, told BBC Breakfast: “The High Street as a whole is absolutely in a mess. Business rates certainly contribute to that.”
Next April, the government moratorium on business rates ends, and they return to normal levels based on values assessed in 2015. Mr Wootton called that “insanity”.
“Unless the government does something, thousands and thousands of jobs and businesses will go. House of Fraser was paying double, treble, quadruple the rates they should be, and that’s not sustainable.”
Frasers Group has now reopened the majority of its stores after lockdown, while online sales were described as being “strong”.
The company also renewed its attack on the management of Debenhams during the High Street crisis. The chain is now in administration for the second time, and there were reports last week that Mr Ashley is interested in taking on 30 stores.
“We continued to follow the further demise of Debenhams during the year with much frustration and disappointment as it entered administration for a second time,” Frasers said in a statement.
“We raised our concerns and gave numerous warnings about what we were seeing there, much of which has materialised. Our offers of help were repeatedly disregarded and it is scandalous that this business has now been in administration twice.”
Talking to the BBC, Mr Wootton declined to be drawn on buying Debenhams. “We look at things with varying degrees of seriousness.”
Analysts at Liberum described the results as “robust” and said they pointed to further growth over the next 12 months. Shares in Frasers, down a third so far this year, had jumped 14% by mid-morning on Thursday.