* Impossible to give 2020-21 guidance
* Preparing for significant downturn in sales
* Sales down 30% March 15-17
(Adds detail, CEO quotes, shares)
LONDON, March 19 (Reuters) - British clothing retailer Next
said on Thursday it could sustain a hit from coronavirus
of more than 1 billion pounds ($1.2 billion), or 25% of annual
sales, without exceeding its debt and bank facilities.
The group, which has about 700 stores, with about 500 of
those in Britain and Ireland, and also operates its online
Directory and catalogue business, said uncertainty around the
scale, timing and impact of the pandemic means it is impossible
to give meaningful guidance for profit in 2020-21.
Next said it was preparing for a significant downturn in
sales. Total brand sales were down 30% from March 15-17, with
sales at stores down 46% and online down 25%.
Its shares were up 3.1% at 0856 GMT, paring losses for 2020
so far to 44%.
Next noted that to date, homeware and childrenswear sales
appeared to be less affected than adult clothing.
The group said online sales were likely to fare better than
stores through the crisis but would also suffer significant
losses.
"People do not buy a new outfit to stay at home," said chief
Executive Simon Wolfson.
However, he said a long term effect of the virus could be to
speed up business moving online.
"We've been coping with the transformation from online to
stores for many years. There's a possibility that the
coronavirus will accelerate that process," he told Reuters.
Next said its priorities were to keep its workplaces and
shops as safe as possible for customers and staff, securing the
cash resources of the business and developing its online
platform and product ranges throughout the next six months.
The group said the virus has had some effect on its supply
chain, though as yet the only meaningful delays have come from
suppliers based in mainland China. Mainland China accounts for
27% of Next's supply base, excluding third-party brands.
"In reality, the threat posed to the supply of goods pales
into insignificance when compared with the potential impact on
demand," Wolfson said.
Next made a pretax profit of 728.5 million pounds in the
year to January 2020, slightly ahead of guidance, on group sales
up 3.3% to 4.36 billion pounds.
($1 = 0.8703 pounds)
(Reporting by James Davey; Editing by Kate Holton and Edmund
Blair/Emelia Sithole-Matarise)
Next (NXT)
