The retailer Next has warned that it faces a £ billion hit to its accounts after it has seen sales drop by thirty per cent over the last few days.
The Company reported a rise in full-year sales, helped by double-digit growth in its online unit but said that it would not be paying a dividend to shareholders because of the impending Covid-19 crisis.
Online, where it generated the majority of its sales, rose 12% to £2.15 billion. The bricks and mortar retail unit, last year Next’s largest sales contributor, was this year usurped by online and saw sales fall 5.3% to £1.85 billion. Next also generates sales revenue from its Finance segment, which allows customers to buy on credit.
On the Covid-19 crisis the Company said that:
“We have no experience of a similar crisis so there is no way of predicting the extent that the effect coronavirus will have on our Retail and Online sales. It is not yet clear how widespread the virus will be at any one time, how long the pandemic will last and what the medium- to long-term effect of this pandemic will be on consumer behaviour.
“Demand will be the biggest issue and although the virus is likely to impact our operations, we do not believe this will be as damaging as the very significant drop in sales sustained both in Retail and Online.”
Next said it Online segment will likely fare better than the Retail unit, but the company cautioned it will “also suffer significant losses”.
