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UK’s High Street Retailer Next Shuts Down Online Shopping Due To Coronavirus

UK’s High Street Retailer Next Shuts Down Online Shopping Due To Coronavirus
United Kingdom’s high street retailer Next has decided to temporarily stop all of its operations to protect its staff from being infected with the coronavirus.  
With the number of people catching Covid-19 – the disease caused by the novel coronavirus, in the UK and the number of deaths on an upward curve, the company had to take the “difficult decision” of shutting down its operations to keep its staff at its warehouse and distribution channel safe from contracting the disease.
“Next has listened very carefully to its colleagues working in warehousing and distribution operations to fulfill Online orders.  It is clear that many increasingly feel they should be at home in the current climate,” the company said in a statement last night.
This prompted Next to take the difficult decision of the temporary closure of its online, warehousing and distribution operations starting last evening. The company said that no more orders will be taken by it until further notice.
There was a 5.7 per cent drop in share price of the company following the announcement.
“The decision to effectively shut down the website shows staff shortages are playing havoc with keeping the business operational. Online was the only channel to drive any source of income and the tap has been completely turned off,” said Richard Lim, CEO of research house Retail Economics.
Earlier, online shopping operations were also stopped by both River Island and Moss Bros in the country. The reason for the closure of the companies was to protect their employees from contracting the disease.
“The government has said online retailers can ‘operate normally’, but Covid-19 is serious and nothing feels normal at the moment,” River Island said. “Right now, we need to put our people first and so we’ve made the difficult decision to temporarily close our distribution centre.”
There is likely more such closures to follow, warned Retail Economics.
“For many non-essential retailers that had to shut stores, online was their lifeline to continue trading, albeit at much lower levels because of capacity constraints,” chief executive Richard Lim added.
“Whether this shutdown will have longer-term scarring effects is dependent on the underlying health of the business and whether they can survive a cash crunch in the coming months. For many retailers, cash flow will soon turn negative and the question is how long these companies can continue to operate without additional financing.”
The coronavirus outbreak in the UK will “very significant” impact sale of the company, Next has already warned.
“When the pandemic first appeared in China, we assumed that the threat was to our supply chain,” Next said. “It is now very clear that the risk to demand is by far the greatest challenge we face,” the retailer said earlier this month.
“And we need to prepare for a significant downturn in sales for the duration of the pandemic.”
A warning of a hit on its digital revenues was announced by Next even before it decided to close down its online shopping operations.
“People do not buy a new outfit to stay at home,” Next pointed out.

Christopher J. Mitchell

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