Next reported a 1.1% fall in full-price sales for the nine weeks to 26 December – with a 43% collapse in demand in stores nearly made up for by a 38% increase for online.<\/p>\n
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That was much better than the 8% overall decline for the period that the retailer had expected.<\/p>\n
Shares rose 8% in early trading.<\/p>\n
Next sounded a further gloomy note about the performance of stores, saying it has previously been “overly optimistic” about them.<\/p>\n
It now expects to see annual sales declines “for the foreseeable future” and will take a further £40m charge against the value of its stores, taking the total to just under £100m for the year.<\/p>\n
The retailer also revealed that it had seen supply disruption as the pandemic affected shipping from the Far East – with many deliveries currently running two to three weeks late – but said it had not experienced problems due to Brexit.<\/p>\n
A week-by-week breakdown of the latest sales period showed how demand bounced back after November’s lockdown in England ended but took a further hit as Tier 4 restrictions came into force days before Christmas.<\/p>\n
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Next said products that did well were children’s clothes, home ware, loungewear and sportswear while those that did badly were work and party outfits – mirroring trends seen earlier in the year.<\/p>\n
The group is now pencilling in a full-year pre-tax profit of £342m for the year to January, less than half of the £728m reported for the previous year, with sales expected to be 16% down.<\/p>\n
For 2020\/21, Next expects annual profits to recover to £670m with sales returning to the same levels of two years before.<\/p>\n