What: Wittington Investments, the parent company controlled by the Weston family, has committed to supporting the business

Why it is important: lockdowns and removal of tax-free shopping may trigger a GBP 680m write-down

The company has been faced with a devastating drop in tourist flows as well as enforced store closures and is also dealing with the end of the previous tax-free shopping regime for tourists who visit Britain.

Those are the key points to come out of the accounts filing of SHEL Holdings Europe, parent company of the department stores operator (also including Brown Thomas, Arnotts, and De Bijenkorf).

The firm filed its accounts at Companies House covering the year to February 2020 and said that in the year concerned, its revenue rose to GBP 1.522 billion from GBP 1.452 billion. Pre-tax profit fell to GBP 37.8 million from GBP 103.3 million and net profit fell to GBP 31.1 million from GBP 82.2 million. But EBITDA rose to GBP 299 million from GBP 206 million.

But what was more interesting was that it warned of a “severe but plausible” situation in which its UK banking covenants might be breached due to the ongoing coronavirus restrictions.

And while it also said it's confident it would be able to renegotiate these, it also said that Wittington Investments – the ultimate parent company controlled by the Weston family – has committed to supporting the business in the “unlikely event” it can’t successfully renegotiate those covenants.

Fashion Network: Weston family may need to pump cash into Selfridges

Retail Gazette: family behind Selfridges poised to fortify department store

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