Next stops online shopping amid UK coronavirus restrictions

  • 3/27/2020
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Next said it had taken the “difficult decision” to close its website as the coronavirus shutdown threatens to wipe more than £11bn off fashion sales this year. With all high street clothing specialists forced to close their doors this week, analysts at GlobalData think the amount that Britons will spend on clothes and shoes will tumble by 20% – or £11.1bn – in 2020. That is a fall equivalent to the combined annual clothing sales of the three market leaders Primark, Marks & Spencer and Next. Amid a growing backlash against retailers who continued to sell online, Next said it had stopped taking online orders “until further notice”. The company said it had “listened very carefully to its colleagues working in warehousing and distribution operations to fulfil online orders. It is clear that many increasingly feel they should be at home in the current climate.” On Thursday the high street chain River Island and the luxury fashion retailer Net-A-Porter also said they were closing their websites. River Island said it would fulfil existing web orders but would not process any new ones as it began closing down its distribution centre in Milton Keynes. Its chief executive, Will Kernan, said it had made some “difficult choices” to protect the health of staff. Major high street names including M&S, Primark and Next have already warned of heavy consequences as the UK is forced to stop shopping. On Thursday the ratings agencies Moody’s and Standard & Poor’s (S&P) both cut M&S’s investment rating to junk. S&P said Covid-19 related restrictions on the high street would “materially reduce sales in its clothing and home division” which would only be partially mitigated by online sales and the anticipated resilience of its food halls. Kate Ormrod, a retail analyst at GlobalData, predicted sales of retailers’ spring/summer ranges would now be a washout with companies already being forced to cut prices to win custom. Ormrod said: “Amid a UK lockdown and self-isolation, buying new clothes and footwear is far from a top priority for consumers, making spring/summer a season to forget for fashion retailers – but one with long-lasting consequences.” Next had already predicted that disruption stemming from the outbreak could wipe £1bn off this year’s sales while Primark has been desperately trying to cancel orders placed with suppliers. With its stores – and now its website - out of action, Next has been trying to delay orders and is considering leasing extra warehousing to hold stock flowing into the business. The forced closure of all non-essential shops by the government is a fresh blow for a high street which was already struggling as weak consumer spending was compounded by the shift to online spending. The scale of high street decline was spelled out by new research from the advisory firm Deloitte which showed that a net total of 9,169 stores closed in the UK last year, which was a fifth more – the equivalent of 1,619 stores – than in 2018. That is the equivalent of 25 stores a day.

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