Next has issued its (typically thorough) results covering the financial half year ended July 2020. Full price sales were down -33% YoY, while profit before tax was £9m.
Full-price sales in the last seven weeks were up +4% YoY – a strong start, says Next, driven by the cooling weather and fewer overseas holidays. The retailer envisions full-price sales for the rest of the year to reach -12%.
Next says sales through the pandemic have proved more resilient than expected, driven by the scale of its online business, breadth of product offer, and the fact that many of its stores are located out of town – shoppers have been more reluctant to visit stores in crowded places, or those typically reached by using public transport.
When it comes to finances, Next reduced its stock levels and costs as the pandemic progressed, and also generated cash flow from its customer credit book and the sale of assets, so is likely to go into next year with significantly less net debt.
Despite the fact that sales fell in the half, Next's average active customer base increased by +1.9% to 6 million, driven by growth in UK cash customers (those not using a nextpay credit account) – which the retailer attributes to retail customers switching to online orders when the stores were closed.
This year, Next expects to increase net retail space by 114,000sqft, while reducing the overall number of stores by one. It expects to close 13 mainline stores this year (one fewer than forecast in March).