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

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Via Yahoo Finance

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.

The company has 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.

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

The sale and leasebacks are part of phase two of its plan, which also includes raising £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 it expected to permanently close a net 12 stores and relocate five.

It said in the past year it had secured rent cuts averaging 30% across 44 stores where it renewed leases, and closed nine stores.

Simon Wolfson, the chief executive, said at the time that the group was planning for a sales hit of up to £1bn in the year ahead as the UK prepared for lockdown.

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Next said annual profits could dive to £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 has been a fresh blow for a high street already struggling as a result of weak consumer spending and the shift to online shopping. The scale of the decline has been highlighted by research from the advisory firm Deloitte showing that a net total of 9,169 stores closed in the UK last year.

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