The chief financial officer of Sports Direct owner Frasers Group blamed the lack of consumer confidence in the run up to Christmas on the recent Labour Budget, which has “attacked a sector” in need of help.
Speaking to Retail Week this morning following the retail giant’s half year results, chief financial officer Chris Wootton said his educated guess is that weakened consumer sentiment comes as a result of “the doom and gloom” around the Budget.
“The Tories put the economy into a coma and Labour have turned the machine off,” he said. “We’ve definitely seen the drop off. If you think of retail as a sector it’s been on its knees for many years and what it didn’t need was for the government to kick it in the face, which is what it’s done.
“It shows a degree of complete economic illiteracy on the part of the government to do what they did.”
While Wootton was not full of optimism looking ahead to Christmas, he said the hope for the peak trading period lies in how much Brits love Christmas.
“It’s difficult to say as we can only deal with the here and now but I still think the UK consumer has money in their pocket. We have still got a very well employed country, everyone who wants a job has got a job, and there has been wage growth.
“I just really think at the moment it’s a confidence thing. Whether that confidence will come back in time for Christmas I don’t know but I do know that the British love Christmas.”
Wootton also stressed that the government need to clarify what is happening around business rates as “a matter of urgency” and said he is not surprised that nothing has been done about rerforming the business rates system to date.
Despite this, Wootton is confident that Frasers Group as a whole is on track with its strategy and remains laser-focused on long-term growth.
The long-term plans of Frasers include its ongoing international expansion strategy, following its most recent acquisition of South African sportswear retailer Holdsport Group. Wootton called the sportswear market “resilient” and said the business was a great fit.
“We’re very excited about it,” he added. “Moving on to the other parts of our international expansion, we’ve got lots of exciting ventures and it’s very much one of our key focuses.”
A business that’s very much still on the radar for Frasers Group is fast-fashion player Boohoo, and Wootton said that despite today’s profit warning Frasers’ overall strategy hasn’t changed, hinting that its acquisitive behaviour will only continue.
Speaking about Boohoo, Wootton said: “We certainly still see a strategic fit with it for sure and we’ve invested a lot of money in it as well as being a supportive shareholder for a long time. We just feel that it needs a change of direction and quickly.”
This comes as Frasers reported an 8.3% dip in group revenue to £2.54bn for the 26 weeks to October 27, 2024, while adjusted profits also fell by 1.5% to £299.2m.
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