LONDON (Reuters) – British clothing retailer Next (NXT.L) hit a self-imposed daily limit within hours of re-opening its online business on Tuesday, indicating consumer demand during the coronavirus lockdown.
FILE PHOTO: Shoppers walk past a Next store on Oxford Street in London, Britain December 17, 2018. REUTERS/Simon Dawson/File Photo
Government guidelines encouraged online operations to remain open and retailers such as Marks & Spencer (MKS.L) and John Lewis have kept theirs going, as have pure online players ASOS (ASOS.L) and Boohoo (BOOH.L).
Next shut its stores on March 23, a day before Britain went into lockdown, and halted its online business, which provides over half its revenue, on March 26, bowing to pressure from warehouse workers worried about their health.
On Tuesday, Next said it had partially reopened its online operation after implementing “very extensive additional safety measures” and consultations with staff and its recognised union, USDAW.
Analysts at Peel Hunt noted that Next online generates annual revenues of more than 2 billion pounds ($2.5 billion), of which around 25% is by Label, its third-party branded platform.
“With the industry likely to be swamped by unsold seasonal product, we believe Next will benefit as a useful clearance channel, especially given the group’s commission model, which will give the brands a level of control over pricing and ranging,” they said.
Next’s website reopened for items such as childrenswear and selected small home items at 0600 GMT but reached its self imposed limit before 0730 GMT and is now closed until Wednesday.
“The idea is to begin selling in low volumes, so that we only need a small number of colleagues in each warehouse at any one time, helping to ensure rigorous social distancing is complied with,” it said.
To achieve this, Next will only allow orders for the number of items it believes can be picked safely on any given day.
At that point it will then stop taking orders and convert the website to “browse only” until the following morning.
Initially only categories that customers most need will be offered. Other product ranges may be added at a later date.
Shares in Next, which have lost 34% of their value so far this year, were flat at 1033 GMT.
Next said it had “completely re-organised” the way its warehouses, which are mainly near the northern English city of Doncaster, work to enable rigorous social distancing.
It had also instigated measures such as enhanced sanitisation and ensuring safe movement when entering, moving around and exiting from each site, mainly through setting-up clear one-way systems and new walkways.
Next said operations will start only with staff who wish to return to work and can do so without using public transport and a spokesman said more than 3,000 volunteers had already offered to return to work and would be paid bonuses.
As all have to be trained in the new safety arrangements before they start, Next operated with about 500 on Tuesday.
Pre-crisis the group’s total warehouse operation employed about 9,000. However, that figure also includes workers who serve Next’s stores rather than the online business.
Reporting by James Davey; editing by Kate Holton, Sarah Young and Alexander Smith