retail

Next HQ and three warehouses up for sale in virus-mitigation plan

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Next is seeking buyers for its headquarters and three warehouses as it tries to raise tens of millions of pounds after the temporary closures of its stores and website.

After the closures last week, the company appointed Savills, the property agent, to find a buyer for its head office in Leicester, and another agent, Acre, to oversee the disposal of three warehouses, which would all then be leased back.

The retailer said last month that it could potentially raise up to £100m through the sale and leaseback of properties, including warehouses, as part of a mitigation strategy to shore up its balance sheet against the effects a fall in trade during the coronavirus outbreak.

Next has come under pressure, alongside hundreds of other retailers, that sell non-essential goods after being told to shut stores under the government’s measures to control the spread of coronavirus.

The retailer has slashed investment plans by £45m and suspended its share buyback scheme as it hoards cash to try to survive the crisis under phase one of its plan to mitigate the impact of lost sales.

The sale and leasebacks are part of phase two of its plan, which also includesraising £100m against income from its online business.

Sky News first reported the appointment of Savills on the potential HQ sale on Wednesday. Next has said it is also considering delaying a shareholder dividend worth £147m.

Last month, Next said it was seeking rent cuts of about 40% on 53 stores with leases due for renewal in the year ahead, and expects to permanently close a net 12 of its stores and relocate five.

In the past year, the retailer said it had secured an average 30% rent cuts on 44 stores where it had renewed leases and closed nine stores.


Those savings were announced last month when Simon Wolfson, the chief executive, said the group was planning for a sales hit of up to £1bn in the year ahead as the UK prepared for lockdown.

Next warned annual profits could dive to just £55m, less than a tenth of the £594m booked in the year to January 2020. Under that worst-case scenario, Next predicted it might book no full-price sales for up to a month leading to a £1bn drop in annual sales.


The forced closure of non-essential shops is a fresh blow for the high street, which was already struggling as weak consumer spending was compounded by the shift to online spending. The scale of the decline has been highlighted by research from the advisory firm Deloitte, which showed that a net total of 9,169 stores closed in the UK last year.

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