Clothing retailer Next said today the industry was facing a crisis that is unprecedented in living memory, but believes that its balance sheet and margins will help it weather the storm.
The group said it has no experience of a similar crisis so there is no way of predicting the extent that the effect coronavirus will have on its retail and online sales.
Next said it is preparing for a "significant" trading downturn as it revealed full-price sales have tumbled by 30% in recent days.
The group said stress tests showed the business could "comfortably sustain" more than £1 billion loss of sales over the full-year - including sales declines of up to 100% in some weeks during the peak of the outbreak.
Online sales are likely to fare better than stores due to social distancing measures, but it gave a bleak outlook for trading in the coming months, cautioning that "people do not buy a new outfit to stay at home".
The comments came as it reported a 0.8% rise in pre-tax profits to £728.5m for the year to January as overall full-price brand sales lifted 4%.
Next's chief executive Simon Wolfson said that when the pandemic first appeared in China, the company assumed that the threat was to its supply chain.
"It is now very clear that the risk to demand is by far the greatest challenge we face and we need to prepare for a significant downturn in sales for the duration of the pandemic," Mr Wolfson said.
"Online sales are likely to fare better than retail but will also suffer significant losses. People do not buy a new outfit to stay at home," he added.
The group has about 700 stores, with about 500 of those in Britain and Ireland. It also operates its online Directory and catalogue business.
It said today that total brand sales fell 8.8% in the week commencing March 8 and were down 30% from March 15-17.
Next said its priorities were to keep its workplaces and shops as safe as possible for customers and staff, securing the cash resources of the business and developing its online platform and product ranges throughout the next six months.
Additional reporting from Reuters
