Next PLC (LON:NXT) said full-year sales could tank by 40% due to coronavirus pandemic in a worst-case scenario.
In a trading update, the fashion and homewares retailer said net cash loss could be up to £850mln but underlying earnings (EBITDA) would not fall below £20mln.
READ: M&S double upgraded and Next downgraded as Credit Suisse rebalances views on UK retail
The FTSE 100-listed firm reopened its online operations on April 14, after an initial closure to prevent the spread of coronavirus, though the ramp-up has been gradual and it aims to reach 70% of normal capacity in the next two weeks.
There are also plans to re-purpose physical stores to ensure social distancing once the authorities allow reopening.
The firm said it saved £290mln by cancelling stock, although all orders up to April 10 were paid to suppliers.
Next identified further items worth £330mln in the current spring/summer collection that can be carried over to 2021, representing 15% of the total offer.
The retailer said it anticipates savings in other areas - £120mln in operations, £135mln in wages and £250mln from tax relief. It is also in the process of selling its headquarters in Leicestershire for £48mln.
In the weeks between January 26 and April 25, Next said its sales were down 38% compared to the same period last year.
"Despite near-term pressures, we favour Next’s positioning in the market especially as it rolls-out Platform Plus," analysts at Liberum commented.
Platform Plus allows Next to market items from partner brands even if they are not in stock.
"COVID-19 should accelerate brands moving to this model and it is because of this, that we think the group could benefit from raising funds."
Shares were flat at 4,793p on Wednesday morning.
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