Next pre-tax profits fall 97% to £9m

Next saw pre-tax profits fall 97 per cent to £9 million in the first half of 2020, although it remained ‘resilient’ thanks to its online operations.

The fashion and homeware retailer’s latest financial report revealed that full price sales were down by a third in the six months to 25 July, with a half-year loss of £16.5 million.

However, despite the impact of the pandemic - which had been “expensive and miserable” - the company said sales performance had been “more resilient than we expected” and raised full-year guidance to £300 million, up from the £195 million expected in July.

Next said that the scale of its online business, its wide product ranges and the fact that much of its store portfolio was located out of town centres, had “served to mitigate the worst effects of the pandemic on trade”.

The company said it had benefited from the shift to online sales, which already accounted for more than half of the company’s turnover going into the pandemic. “We had the scale online to make up for some of the business we lost, and continue to lose, from our stores,” the report read.

It added that consumer online shopping habits appear to have stuck, with sales online been significantly stronger since our stores reopened than they were before the pandemic struck.

Next also stated that there had been much to learn from the operational disruption of the pandemic. “We have discovered powerful ways to improve our warehouse and call centre operations, perhaps more importantly, the experience of having to work from home has opened our eyes to new and better ways of working, collaborating and communicating amongst ourselves and with our suppliers."

The report’s summary concluded: “The sharp slowdown in our operations has given many of us the time and the motivation to accelerate our efforts to leverage the company’s skills, people and infrastructure – developing new businesses in a rapidly changing world.”

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