Next stores suffer but online sales surge as UK goes back into lockdown

Fashion giant Next today reported surging online sales had compensated for nearly all the losses from its “bricks and mortar” stores during November and December but warned of a sharp hit to January takings from the Covid lockdowns announced last night.

Childrenswear, loungewear and sportswear had fared well as shoppers worked from home, but adult officewear and party clothes did badly, repeating the trend set during previous Covid restrictions.

Online customer numbers are up 24% on a year ago, the group said.

Profits for 2020, which had been expected to come in at £365 million, will now be £370 million.

Online UK sales surged 36% in the fourth quarter to 26 December while shops sales fell 43%. Taking in overseas online sales, the overall increase in Next’s digital business were up 38%. 

Within retail, out of town retail parks did better than town centres and shopping centres.

Shoppers are using less of Next’s finance facilities, choosing to lower their credit balances, meaning finance interest income to Next fewll 13% in the nine weeks to Boxing Day.

However, profits gained during the outperformance in November and December had been “almost entirely offset” by the expected hit to January full price retail sales and the additional costs of clearing unsold store garments through the website.