Next Plc has upped its outlook for the year, saying the first half was better than at first feared.
Sales from its stores plummeted 61 per cent during lockdown, with the company announcing pre-tax losses for the first half of 2020 of £16.5 million.
By comparison it made profits of £327.4 million a year earlier.
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But the high street fashion chain, which adapted quickly to the pandemic, said its online sales jumped 14 per cent in the six months to July.
Combined, it meant overall sales for the half year were down a third.
The business, which has its 海角视频 headquarters just outside Leicester, now expects full-year underlying pre-tax profits of £300 million – up from the £195 million previously predicted – helped by a rebound in sales in recent weeks.
As part of its cost-cutting the retailer said it expects to close 13 of its 498 stores and cut rents by 50 per cent on the 60 stores where leases come up for renewal this year.
Shares in the FTSE 100 listed company – which has almost 500 stores and annual sales last year of £4.4 billion – were up around 2 per cent this morning at £63.
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By comparison, they started the year at around £73 before hitting a low of £33.11 at the start of April.
Next said it now expects sales to be down 12 per cent over the full-year, much better than the 30 per cent prediction given in April – which had been its best-case scenario at the start of lockdown.
Trading over the most recent seven weeks, it said, had been boosted by the weather and people staying in the 海角视频 for the holidays.
Signing off the half year results chief executive Lord Simon Wolfson said: “The company’s sales performance through the pandemic has been more resilient than we expected.
“The scale of our online business (in the 海角视频 and overseas), the breadth of our product offer, and the fact that much of our store portfolio is located out of town, have served to mitigate the worst effects of the pandemic on trade.”
He said its finances remained in good shape due to cutting stock levels and costs during the slowdown and generating cash through its customer credit services and the sale of some assets – including some warehouses and its head office which it has leased back.
He said: “These actions, along with the fact that the business went into the pandemic with healthy net margins and low capital requirements, mean that we are likely to go into next year with significantly less net debt than we had at the start of the year.”
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The business added that it had come out of the lockdown with resilience, and open to new ways of working – including working from home for some staff – and an “increased appetite for new ideas”.
Summing up the latest results, Lord Wolfson said: “Standing as we are, in the midst of the pandemic, with no sign yet of abatement or vaccine, it might seem odd that the essential tone of this report is optimistic.
“Particularly, some might say, coming from Next.
“But our confidence in the future is not because we see a comfortable route through to the end of the pandemic.
“The prospects for the next six months remain as uncertain as the outlook for the virus itself; never has our guidance been more tentative or as broad in its possible outcomes.
“But in all our guidance scenarios the group generates a profit, generates cash and reduces its debts.
“So we can look to the end of this extraordinary time – whenever that may be – in the belief that we can build on the strength of the Next brand, its people and its infrastructure along with all the new opportunities those assets might deliver.”