// Next full-price sales drop 28% in second quarter
// Online sales drop 9%
// In-store sales drop 72% since reopening stores in June
Next has recorded a 28 per cent slump in full price sales in the second quarter, as it experiences tough trading since reopening stores.
The fashion retailer posted a nine per cent rise in online sales year-on-year in the second quarter to July 25, while in-store sales plummeted by 72 per cent during the period.
The full-price sales drop was “much better than we expected and an improvement on the best-case scenario given in our April trading statement,” Next said.
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However, Next’s online sales continued to grow as Next warehouses returned to normal capacity during the last 13 weeks.
The retailer also said that the drop in in-store sales eased to 32 per cent year-on-year since reopening in June.
Total full price sales were down eight per cent over the last six weeks of the quarter.
Looking at the whole first half, Next’s overall full price sales were down 33 per cent year-on-year.
Of that, online sales was down 11 per cent and in-store sales was down 62 per cent.
Next blamed its lack of advertising on the “underperformance” in markdown sales.
It said it did not advertise due to fear of overcrowding in reopened stores during the coronavirus pandemic.
Despite the sales drop, Next said it is in “a much better position than we anticipated three months ago: consumer demand has held up better than expected and our online warehouses have achieved much higher capacities than we thought possible”.
“Costs have been well controlled, and we have taken steps to ensure that our balance sheet is secure,” the retailer said.
“Whilst much of our time has been focused on managing the business through the pandemic, we have not lost sight of the fact our sector was already experiencing far-reaching structural changes as consumers increase their expenditure online.
“If anything, these changes are likely to accelerate as a result of the crisis.”
Earlier this month, Next had been chosen as the “preferred” UK franchise partner for lingerie retailer Victoria’s Secret and agreed to an outline deal to take over the business on this side of the Atlantic.
Next beat off bidding competition from embattled retailer Marks & Spencer.
An “outline deal” has been agreed between Next and Victoria’s Secret’s administrators, and part of that deal includes the fashion retailer securing an “exclusivity” agreement until the end of September.
Next will announce the full results, including profit figures, for the first half of the year on September 17.