High-street clothing and home retailer Next (NXT) has issued a short statement to say it is closing its online, warehousing and distribution operations. The firm stopped taking online orders on Thursday night and 'will not be taking any more orders after this time until further notice'.
The move came after a growing number of staff at its warehousing and distribution operations expressed concern that they were still being made to work. ‘It is clear that many increasingly feel they should be at home in the current climate’, the company added. The shares fell 6.5% to £42.22.
Next closed all of its 500 UK stores on Monday, shortly ahead of a government order that all non-essential shops should close.
ONLINE SUCCESS
In its results for the year to 31 January, published last week, the firm reported profits ahead of market estimates thanks to better than expected full-price sales in the final month, which came on the back of stronger Christmas sales.
In-store sales were down 5.3% for the year to £1.85bn, with almost all of the increase coming from online sales up nearly 12% to £2.15bn or almost half of group revenues including finance income.
While it admitted there was no precedent for the current crisis, and therefore no way to predict the extent of its impact, the firm said it expected that the fall in demand wouldn’t be ‘as damaging as the very significant drop in sales sustained both in retail and online.’
Online sales were ‘likely to fare better than retail but will also suffer significant losses’, while evidence from its overseas operations suggested that ‘as restrictions on movement increase the difference between online and retail sales performance widens, with online picking up a small amount of the business that cannot be carried out in store.’
Analysts at Shore Capital had already withdrawn their earnings forecasts earlier in the week and have put their recommendation under review pending further clarity on the temporary closure of the stores and now the online business.
