RCS - Frasers Group PLC - Acquisition of Studio Retail

FrasersAnnouncement

25/02/2022 15:00

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RNS Number : 8733C  Frasers Group PLC  25 February 2022

25 February 2022

FRASERS GROUP PLC

("Frasers" or the "Company")

Acquisition of Studio Retail

Further to Frasers RNS today, 25 February 2022, announcing the acquisition of
certain trade and assets of the Studio Retail Group ("SRG"), Frasers wishes to
set out some key concerns regarding the demise of SRG as a listed business.

 

Frasers will always act when it considers it necessary to protect shareholder
value such as in the past with the failure of Debenhams plc.

 

Frasers wishes to be absolutely clear that it has long advocated that SRG was
in need of a strategic review to maximise/protect shareholder value. Frasers
wrote to SRG conveying such a view in Autumn 2020. Although Frasers tried to
remain a supportive shareholder it indicated to SRG management a number of
concerns around areas such as accounting estimates and judgements and whether
management were taking a sufficiently conservative view. This led to Frasers
voting against the Chief Financial Officer's re-election in 2019 (albeit he
was re-elected with a vote of 58.06% in favour).

 

SRG is another example of a business which has buried its head in the sand
whilst the world around it changed. Furthermore, it is clear that the
fundamentals of its business were, at best inadequately scrutinised by its
board and/or advisors to the business, or at worst, deliberately concealed as
the business entered its death spiral.

 

In the opinion of Frasers the public statements issued by SRG to the effect
that a loan of £25m would have been sufficient to preserve the group as a
going concern will prove to be a gross underestimation of the scale of the
issues facing the business.

 

Frasers is of the view that a UK corporate governance regime that countenances
sudden and unaccountable failure of businesses, viable one week, and
irredeemably broken the next, entirely without sanction or censure of those
involved, is clearly unfit for purpose and in need of urgent reform.

 

In the opinion of Frasers, if the regulation of business is to have any
purpose at all it should be in ensuring that businesses and jobs do not simply
disappear overnight, damaging lives, eroding shareholder value, and tarnishing
the reputation of the UK business system as a whole.

 

Frasers does not see the failures of listed public companies such as
Debenhams, Goals and SRG as isolated incidents but rather as manifestations of
systematic governance failures and a lack of corporate and individual
accountability.

 

Frasers believes that it should be an urgent priority of government to
increase the meaningful regulation of UK business, including by fully
investigating the collapse of ALL listed businesses, and imposing fines and/or
criminal penalties on any individuals found to have been complicit in or
responsible for any wrongdoing which contributed to their failure.

 

Frasers also believes that increased enforcement powers are not of themselves
enough and that sufficient resource needs to be made available to the
Financial Reporting Council/Audit Reporting and Governance Authority, and
Financial Conduct Authority amongst others to properly police the regime and
act decisively as a deterrent to others.

 

Ends.

 Frasers Group plc

 Tom Piper, Company Secretary   T. 0344 245 9200

 LEI: 213800JEGHHEAXIJDX34      E. investor.relations@frasers.group

 

 

 

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