British clothing retailer Next’s total product sales plunged % in the latest quarter
British clothing retailer Next said on April 29, 2020 that due to the “lockdown” of the new coronavirus epidemic, all its non-essential stores and its online business were temporarily closed. Total product sales plummeted 41% in the first quarter. Next said that in its first quarter, store sales plummeted 52%, while online sales fell 32%.
Next said sales so far have fallen much faster than expected in March and it is now modeling sales declines in the first and second half of this year. Next has also taken further steps to ensure debt is funded by reaching an agreement with banks to waive next year’s Revolving Credit Facility. Next also received additional funding through the UK Government’s Covid Corporate Financing Facility to assist companies in responding to the coronavirus outbreak. Next has suspended dividends and share buybacks to reduce expenses by a total of 480 million pounds. In addition, the sale and leaseback of warehouses and its headquarters will generate revenue of 155 million pounds.
Next said that even with full-year sales down 40%, these mitigation measures help the company to operate appropriately within cash resources and end the year with net financial Debt will be less than at the end of the year, but Next will face a pre-tax loss of £150m. Next said the situation will depend on it continuing to increase its network operating capacity and store reopenings under new safe working measures.
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