Next temporarily shutting down online operations casts doubt over others, says Retail Economics

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Commenting on Next’s announcement to temporarily shut down online operations, Richard Lim, CEO, Retail Economics said: “The decision to effectively shut down the website shows staff shortages are playing havoc with keeping the business operational. Online was the only channel to drive any source of income and the tap has been completely turned off. 

“Next’s decision to temporarily cease online orders follows River Island and Moss Bros and it’s likely that others will follow suit. For many non-essential retailers that had to shut stores, online was their lifeline to continue trading, albeit at much lower levels because of capacity constraints. Whether this shutdown will have longer-term scarring effects is dependent on the underlying health of the business and whether they can survive a cash crunch in the coming months.

“For many retailers, cash flow will soon turn negative and the question is how long these companies can continue to operate without additional financing.”