Mike Ashley’s Frasers Group has announced plans to spend £60 million between now and and July despite warning less than a month ago that it would suffer a £200 million hit from the Covid-19 pandemic.

The company, which includes House of Fraser, Sports Direct, Evans Cycles and Jack Wills, among others, will start the buying spree on Tuesday – buying a maximum 10 million shares.

Frasers group has launched a £60m share buyback scheme (Joe Giddens/PA)

No reason was give for the decision but businesses typically purchase shares and hold them in reserve to reduce the number of shares available to the public, which tends to push up the share price.

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Frasers said: “The purpose of the programme is to reduce the share capital of the company.”

The move comes less than a month after bosses said the retailer could take a hit in excess of £200 million due to the Covid-19 restrictions – double its previous estimate in February.

At the time, they added that further restrictions are “almost certain”, believing a writedown against freehold values and other non-cash impairments will be required.

Frasers boss Mike Ashley is the company’s biggest shareholder and set to benefit from the buyback which is likely to boost the share price (Lee Smith/PA)

The company has also been critical of the Government’s response to extending the business rates holiday, complaining that the support on offer did not go far enough for big chain retailers.

Despite bemoaning the financial woes for the business, it has also made several unsuccessful attempts to buy up rivals who have struggled during the pandemic, including Arcadia, Debenhams and Peacocks.

Frasers reopened its estate on April 12 following the easing of lockdown restrictions for non-essential retailers. It did not give an update on current trading.

During the first lockdown in March 2020, Mr Ashley tried to claim that Sports Direct was an essential retailer and should remain open, but faced a severe backlash from unions and politicians – including the Prime Minister.