'People do not buy a new outfit to stay at home' says Next boss
RETAIL chain Next has said it is preparing for a "significant" trading downturn amid the coronavirus pandemic as it revealed full-price sales have tumbled by 30 per cent in recent days.
The group - which has more than two dozen mainstream, Home and outlet stores in Northern Ireland - said stress tests showed the business could "comfortably sustain" more than £1 billion loss of sales over the full-year - including sales declines of up to 100 per cent in some weeks during the peak of the outbreak.
It said online sales are likely to fare better than bricks and mortar stores due to social distancing measures.
But the retailer gave a bleak outlook for trading in the coming months, with its chief executive Lord Simon Wolfson saying: "People do not buy a new outfit to stay at home."
His comments came as Next reported a 0.8 per cent rise in pre-tax profits to £728.5 million for the year to January as overall full-price brand sales lifted 4 per cent. Total group sales rose by 3.3 per cent to £4.36 billion.
Online sales performed strongly, rising by 11.9 per cent to £2.14bn, but retail sales fell by 5.3 per cent to £1.85bn.
Lord Wolfson went on: "When the pandemic first appeared in China, we assumed that the threat was to our supply chain.
"But it is now very clear that the risk to demand is by far the greatest challenge we face and we need to prepare for a significant downturn in sales for the duration of the pandemic."
He added: "Online sales are likely to fare better than retail but will also suffer significant losses."
The Next update came during what has been a catastrophic week for business in general, including retail, in what one business leader described as "an increasingly bleak situation", largely due to the coronavirus pandemic.
Fashion and furniture chain Laura Ashley said it will have to call in administrators, putting 2,700 jobs at risk.
And firms from many other industries including airlines, retailers, restaurants, theatres and pubs have said the virus has pushed them to the brink, with several warning of imminent collapse without government help.