Frasers Group, the retail empire founded by Mike Ashley, has warned it expects little to no profit growth in the year ahead, citing mounting concerns over potential tax rises and economic uncertainty following the Chancellor’s upcoming budget.
The FTSE 250-listed group—which owns Sports Direct, Flannels and its flagship Frasers department stores—said it expects adjusted pre-tax profits for the new financial year to come in between £550 million and £600 million. That compares with a modest 2.8% rise in profits to £560.2 million for the year ending 27 April.
Despite headwinds, the company chose to maintain its guidance, pointing to caution over what it called the “drumbeats of doom” surrounding October’s budget statement.
Chris Wootton, Frasers Group’s chief financial officer, said: “We do have to keep an eye on that and so we felt it was sensible to maintain our adjusted profit before tax guidance.”
Group revenues fell by 7.4% to £4.9 billion, driven largely by a 14.8% decline in sales within its premium division—an area that includes its Flannels chain and luxury retail offerings.
The warning from Frasers comes as retail businesses continue to navigate a difficult landscape of muted consumer demand, higher operational costs and the risk of further tax tightening by the government. Investors responded with caution, sending shares in Frasers down 4% to 617p.
The retailer has been on an aggressive expansion push in recent years, acquiring stakes in brands such as Hugo Boss and Boohoo, and investing in premium retail formats. But the downturn in its high-end division highlights the ongoing pressure on discretionary spending as UK households face higher living costs and economic uncertainty.
With Chancellor Rachel Reeves expected to unveil her full budget in October, businesses like Frasers are bracing for potential tax increases and policy shifts aimed at balancing the UK’s strained public finances.
Wootton’s comments reflect a wider anxiety in the retail sector, where even profitable businesses are taking a cautious stance amid shifting political and economic signals.
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Mike Ashley’s Frasers Group warns of ‘dark clouds’ ahead amid flat profit forecast