Next 'facing unprecedented' crisis as firms warn of coronavirus fallout

The chief executive of Next has warned the British high street is facing a crisis that is “unprecedented in living memory” as it joined a slew of companies warning of the devastating impact of the coronavirus pandemic.

Simon Wolfson said it was planning for up to a £1bn hit to sales from coronavirus in the year ahead as the UK prepares to lockdown to control the virus. He called on the government to put place measures to support the income of those who work in shops that are forced to close.

“Our industry is facing a crisis that is unprecedented in living memory, but we believe that our balance sheet and margins mean that we can weather the storm,” he said, adding that the retailer was considering delaying payment of a dividend to shareholders as it hoards cash to try and survive the crisis.

The update came as Burberry said sales at stores open more than one year had slumped by between 40% and 50% since last month’s warning that profits would be affected by the virus. Around 40% of its stores are currently shut with more closures expected in the coming days.

Burberry chief executive Marco Gobbetti said the company was trying to cut costs – including seeking rent reductions from its landlords – against a back drop where it expects sales to be down as much as 80% for the remainder of its financial year which ends of 28 March. Overall the company expects sales for the final quarter to be down 30%.

Other companies lined up to warn of the impact the crisis was having on their businesses.

• National Express, the coach and rail operator, has seen a significant drop in passenger numbers in recent weeks across North America, the UK, Spain and Germany. Its top executives and operational managers are taking pay cuts for the duration of the virus outbreak to save cash, but expect to be paid back once it is over. In North America, the group has been hit by school bus and shuttle bus closures. In the UK, National Express coaches are moving to a service similar to Christmas Day while buses are moving to a typical Sunday service

• Australia’s national carrier, Qantas, has come under fire from unions after it said it would stand down two-thirds of its 30,000-strong workforce without pay and end international flights.

• Everyman, which runs 33 boutique cinemas in the UK, is in talks with lenders to bridge any potential covenant breach. The company has modelled that would happen if virus causes its chain to be shut for three months, followed by one month at 50% normal trade and one month at 65%.

• Bloomsbury, the publishing group, flagged up disruption to bookshops and academic institutions, while reading books – print, ebooks or audio book downloads – is likely to be popular at home.

• The housebuilder Crest Nicholson is suspending all financial guidance and will tap its £250m revolving credit facility to release £185m of cash.

• Young’s, the pub group, has announced a three-month property rent holiday for its tenants. It says: “Let’s be in no doubt that with pub closures imminent, albeit hopefully for only a short period, all businesses in our sector will be severely impacted.”

• Auto Trader, the online marketplace, said it would not charge its retailer customers for their advertising packages in April, and will let its customers defer payment of their March advertising costs by 30 days. This will push the group into an operating loss of £6m-£7m in April.