By James Davey
LONDON (Reuters) – Leading British fashion chain Next <NXT.L> has bowed to pressure from workers worried about their health and shut its online business, cutting off its remaining source of revenue during the coronavirus outbreak.
Rival British retailer Marks and Spencer <MKS.L> has taken a different tack, maintaining its online operations and citing government advice that people should use home delivery services to avoid going out if possible.
Next closed all its stores on Monday, a day before Britain went on lockdown, but had continued to run its online business, which accounts for around half of group revenue.
Next shares slumped on news it was shutting the online operations and were down 8.7% at 41.16 pounds at 1215 GMT.
“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.
“Next has therefore taken the difficult decision to temporarily close its online, warehousing and distribution operations,” the company, whose Chief Executive Simon Wolfson represents the ruling Conservative party in the upper house of parliament, said.
A number of retailers are having to scale back or halt their online activities to try to safeguard their workers’ health.
Amazon.com <AMZN.O> said last week it would stop shipping non-essential products to consumers in Italy and France, due to a spike in orders and the need to respect anti-coronavirus safety measures in the workplace.
BACK TO BASICS
Other fashion retailers in Europe are trying to keep their online businesses going, saying they are confident they can ensure social distancing.
Spain’s Inditex <ITX.MC>, the company behind the Zara brand, has also said its online business remains in operation.
Pure online fashion retailer ASOS <ASOS.L>, which has a large fully automated warehouse in the northern English town of Barnsley, with on average 300 people per shift, is also still running.
Rival Boohoo <BOOH.L> said it is carrying on, utilizing its two distribution centers in Sheffield and Burnley, also in northern England.
However, people’s orders reflect the current crisis.
Items currently selling well include everyday basics such as socks, underwear, leggings and children’s wear, an M&S spokeswoman said.
That echoes comments from Europe’s biggest pure online fashion retailer Zalando <ZALG.DE> which said this week that demand for athleisure and gear for yoga and running has risen as people are forced to work – and exercise – at home.
With all of Britain’s shops closed due to the virus, apart from food stores, pharmacies and corner shops, there has been a growing backlash against retailers who continue to sell online from trade unions and others on concerns about workers’ health.
Next said last week it could sustain a hit from coronavirus of more than 1 billion pounds ($1.2 billion), or 25% of annual sales, without exceeding its debt and bank facilities.
Next said in a letter to staff late on Thursday that its warehouse and distribution staff will be paid their full contracted basic pay until April 11. They will then fall under the UK government-backed job retention scheme, announced last week, amounting to 80% of basic monthly pay.
(Reporting by Pushkala Aripaka in Bengaluru and James Davey and Keith Weir in London; additional reporting by Sonya Dowsett in Madrid; Editing by Kate Holton/ Mark Potter/Susan Fenton)