Next will close 13 stores this year despite anticipating annual profit of £800m.
In its interim results, the fashion retailer said that only three of the stores were being closed “as a result of being unable to agree acceptable new terms with landlords”. The other 10 closures, it said, were in locations where the store would not achieve the firm’s target margins “on almost any terms”.
Next said that more of its stores were moving to turnover rents, with 28 of the leases it expects to agree this year linked to store turnover and 15 of those to be total occupancy cost deals. It wants to increase this as more than 50% of its store leases expire or break within the next five years.
It added that it will open eight “clearance stores”, with turnover-based rents and an average lease term of three-years. Rents for six of the new stores will be total occupancy cost deals. The changes will slim Next’s portfolio from 491 stores as of last January to 486 by January 2022.
Next reported sales of £2.2bn for the six months to July 2021, and pretax profit of £346.7m.
To send feedback, e-mail piers.wehner@eg.co.uk or tweet @PiersWehner or @EGPropertyNews
