Fashion giant Next has put its warehouses up for sale in a desperate bid to raise cash amid hundreds of temporary store closures.
The company is seeking a buyer for its headquarters and three warehouses, after being forced to shut all of its branches – and website – under lockdown measures.
Next 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 £100million 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 sharp decline in sales.
Chief executive Lord Wolfson said this would “secure the cash resources of the business” for the future.
“We have modelled the effects of differing levels of sales declines along with all the measures we can take to ensure that the company remains within its bond and bank facilities,” Lord Wolfson said.
“Our industry is facing a crisis that is unprecedented in living memory, but we believe our balance sheet and margins mean that we can weather the storm.
“The crisis will pass at some point. At that time it will be the work we do to move the business forward that will determine our future success.”
The firm has 16 warehouses throughout the UK, of which eight are major hubs.
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 £1billion in the year ahead as the UK prepared for lockdown.
Next said annual profits could dive to £55m, less than a tenth of the £594m booked in the year to January 2020.
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.
Retail analysis have warned that a fifth of small businesses will go bankrupt on the back of it – while 20,000 shops will never reopen.