Following today’s release of Next Q1 figures for 2020/21, Sofie Willmott, lead retail analyst at GlobalData, a leading data and analytics company, comments: ‘‘Since it initially updated on its full year outlook in mid-March, Next’s worst case scenario has gone from bad to much worse with full-price sales now expected to fall up to 40% (versus its previous view of -25%), demonstrating how demand for clothing & footwear has dropped off a cliff. Considering Next was outperforming the market prior to COVID-19 hitting sales, helped by its strong online channel and wide product range, many clothing retailers will be performing much worse than it is and we expect more casualties over the coming months.
“Next is better positioned than other retailers to weather this unpredictable storm. Although its online channel is not yet operational at full capacity with Next currently able to fulfil around 45% of its normal order capacity and only 70% of the product range available, this is enough to meet demand with the website yet to reach its daily order limit at around 9pm yesterday.
“Its wide assortment means that parts of its product range are more relevant to what shoppers want to buy at the moment, including childrenswear, loungewear and nightwear, athleisure and sectors other than clothing & footwear which are set to fare slightly better this year, like homewares. These areas offer it some protection from the slump in demand for occasionwear, workwear and trend items in general, while its clothing competitors that heavily focus on these areas are in trouble.
“Additionally, Next has plans to open its retail park stores first when lockdown measures are lifted as the larger locations mean they can be operated more safely. Most other clothing specialists will not have this option as their stores are on high streets and shopping centres which consumers may be more likely to avoid given the close proximity to other shoppers.”