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LONDON, April 29 (Reuters) - British clothing retailer Next
said on Wednesday total product sales in its latest
quarter crashed 41%, reflecting the closure of all its stores in
the coronavirus lockdown and the temporary shutdown of its
online operations.
Next said store sales plunged 52% in the 13 weeks to April
25, its fiscal first quarter, while online sales were down 32%.
The firm said the fall off in sales to date had been faster
and steeper than anticipated in its March stress test so it has
increased its cash resources through asset sales, and by
suspending share buybacks and dividend payments.
It has also taken further steps to secure its debt finances
by agreeing with its banks to waive financial covenants in its
Revolving Credit Facility (RCF) for the coming year. It has also
secured additional borrowing facilities through the government’s
Covid Corporate Financing Facility (CCFF).
Next said it now believed its finances are as secure as when
it announced in March, if not more so.
It said that even in its new worst case scenario, with full
year full-price sales down 40%, the mitigation it has put in
place means it can operate comfortably within its cash resources
and will end the year with less net financial debt than at the
end of the previous year.
Next said much will depend on its ability to continue
increasing the capacity of its online operations within the
constraints of new safe working practices and on the timing of
store re-openings.
(Reporting by James Davey; editing by Sarah Young and Kate
Holton)
