Next announces it will shut 11 stores this year in latest blow to the High Street
- Fashion retailer shuttering stores amid poor performance and landlord disputes
Retail giant Next has announced plans to close down 11 more stores this year in yet another major blow to the High Street.
The FTSE100 high street chain said six of the closures are happening because it expects the stores will not be able to reach their target margins.
Two others are closing due to site redevelopments, while the remaining three are shutting because an agreement could not be met with the landlords.
The hammer blow comes after Next closed its store in Westfield Stratford City earlier this year. The names of the stores which are closing have not yet been revealed.
It comes amid a torrid year for the high street in which many major chains have announced closures across the UK. Most recently, Wilko plunged into administration and after rescue talks failed, 400-plus stores are set to close with 12,500 jobs at risk.
Retail giant Next has announced plans to close down 11 more stores this year in yet another major blow to the High Street
Next owns a controlling stake in the UK holdings of lingerie retailer Victoria’s Secret, which runs concessions inside stores (pictured: Miranda Kerr during a Victoria’s Secret fashion show)
Next is run by Tory peer and ardent Brexitteer Lord Wolfson
A Next trading update for the year to date, issued today, said: ‘We expect to close 11 mainline stores this year.
‘Six closures are in locations where we forecast that the store would not achieve our target margin on almost any terms; two closures are due to the site being redeveloped; three further closures are as a result of being unable to agree acceptable new terms with landlords.
‘This last category includes one large store where the length of the lease proposed by the landlord, on a high fixed rent charge, was not something we could agree to.’
The stores report a combined turnover of £30.7million, according to the report. Next did not immediately name the stores, and has not said how many jobs will be saved, or if staff will be moved to other locations.
However, the company reported that sales across its portfolio were up 5.4 per cent in the six months to July 2023 compared to last year, with pre-tax profits of £420m.
It expects to report full-year profits of £875m before tax, revised up from a previous expectation of £845m.
The company has credited good weather and rising wages for its positive financial results, with sales growing 7.5 per cent and 10 per cent in May and June compared to the same time in 2022.
Despite closing 11 ‘mainline’ stores before the end of the year, Next has also opened five new ‘clearance’ outlet stores in recent months to sell off excess stock.
The firm, run by Tory peer and ardent Brexiteer Lord Wolfson, has been snapping up iconic British brands such as Cath Kidston – which fell into administration earlier this year – in a bid to appeal to new customers.
It also owns furniture brand Made.com, baby product retailer JoJo Maman Bebe and the majority stake of the UK holdings of both US clothing firm Gap and lingerie retailer Victoria’s Secret after their British operations ran into trouble.
Next also owns a majority stake of US luxury clothing chain REISS – whose fans include the Duchess of Cambridge.
Shares in Next closed up 3.34 per cent at the close of trading today.
Its strong performance came amid otherwise miserable conditions in the UK retail market – with the death of homeware brand Wilko, and brands such as Boots and New Look announcing closures.
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