Catalogue of woes for Freemans and Grattan amid funding concerns and losses as buyer ‘identified’
The future of Bradford catalogue brands Freemans and Grattan is uncertain as a potential sale remains unresolved and their owner warns of the need for further funding.
The latest accounts, filed at Companies House, reveal combined pre-tax losses of almost £23m across the two businesses, which are part of Freemans Grattan Holdings (FGH).
They also disclose that a prospective purchaser has been identified. The accounts, covering the year to February 28, 2026, say Freemans and Grattan are subject to a “confidential strategic review”.
They state: “At the date of approval of these financial statements a prospective purchaser has been identified.”
But the directors make clear that the purchase has not completed and is not a binding agreement.
The accounts’ going-concern assessment provides a detailed picture of the funding position facing the businesses.
The directors say their cashflow forecasts indicate that, in both the base case and downside scenarios, the group will require ongoing working-capital funding to meet its liabilities as they fall due during the going-concern assessment period.
Importantly, the directors do believe it is appropriate to prepare the accounts on a going-concern basis.
The issue is how that continued funding will be provided. FGH has a three-year, £100m securitised loan facility with HSBC which expires on February 14, 2027.
The directors say there is “no certainty” that the existing facility will be renewed or what terms might apply to any future facility.
And even if the HSBC facility is renewed or replaced, the directors’ forecasts indicate that the group will require additional funding to meet it obligations.
The form of that funding has not yet been determined. The accounts say it may comprise a combination of revised debt facilities and/or financing arrangements associated with a strategic transaction.
At the date the accounts were approved, those additional funding sources were not secured.
That is why the directors flagged the uncertainty. It does not mean the directors have concluded that the businesses cannot survive the next 12 months. Quite the opposite: they have concluded that preparing the accounts on a going-concern basis remains appropriate.
But that assessment is dependent on continued access to funding, including funding arrangements that have yet to be secured.
The prospective purchaser could potentially form part of the answer. The directors say they have held discussions with the prospective purchaser about activity following a transaction and received indications that the buyer does not intend to restructure the group and would provide additional working capital as necessary to enable obligations to be met during the going-concern period.
However, the directors say they are not able to determine the prospective purchaser’s intentions in respect of the future strategy, funding and operations of the group. The final structure and terms of any transaction also remain unknown.
The financial results underline the challenge facing the businesses. Freemans increased turnover by more than £15m to £178.5m, but recorded an operating loss of £8.7m and a pre-tax loss of £8.8m, compared to £12.6m last year.
Grattan’s turnover rose from £54.8m to £60m, but it recorded an operating loss of £13.9m and a pre-tax loss of £14m, compared to £19
Together, the businesses generated £238.5m of revenue but lost around £22.8m before tax.
The losses come despite growth in turnover at both businesses and as they continue their transformation from traditional catalogue retailers into digital businesses.
Freemans says the home-shopping market remains challenging, with strong competition from high street and online retailers.
Grattan describes the UK online retail market as “competitive and highly disrupted”.
Freemans has undergone one of the most significant transformations in its 121-year history, finally abandoning its printed catalogue in 2023 after 118 years.
Grattan, meanwhile, continues to reposition itself around fashion, home and financial services. Its strategy includes rebuilding its fashion credentials, developing its department-store proposition, strengthening customer loyalty through financial services and investing in its digital customer experience.
Credit remains an important part of the business, with Grattan saying 91% of its turnover was generated through credit sales during the latest financial year.
An FGH spokesperson said: “As part of a regular review of its business portfolio, Otto Group is exploring several strategic options for some of its subsidiary businesses as a result strategic options for FGH are under review. No decision has yet been made.
“Under the leadership of Ann Steer CEO, the Freemans business is now twice the size it was when the current management team took over.
“It’s very much business as usual. Freemans continues to perform strongly with a rising customer base and our focus is on AW26.”
Otto acquired Grattan in 1991 and Freemans in 1999. The two operations were subsequently brought together under FGH, making any eventual sale a significant change after more than three decades under German ownership.
