Next wants to sell and lease back HQ and warehouses to raise cash
Next may not seem to have a lot in common with Ted Baker at the moment given that the former is generally very successful and the latter has been struggling, but both are taking the same route to raise cash. Ted Baker last month sold its HQ for a premium price and now Next is hoping to do the same, as well as offloading three warehouses.
The Leicester-based company wants to raise tens of millions of pounds to help it through the temporary closure of all of its shops and its online store. It has appointed property agent Savills to find a buyer for the HQ and Acre to run the sale of the warehouses. It then plans to lease all of them back.
It's a logical move for the company at a time when cash flow is tight, even though it will add additional costs onto its bottom line in the years to come. For now though, the focus is survival.
The company had flagged up last month that it could potentially raise up to £100 million by selling and leasing back certain properties.
In order to boost its cash balance during this difficult time the company has, like most of its retail peers, also reined-in its spending and has cut its investment plans in the short term by £45 million.
Other initiatives to help it hang on to more cash include considering delaying a shareholder dividend and also talking to landlords about rent cuts on 53 of the shops that are due to see their leases renewed in the next 12 months. It has already managed to achieve rent cuts on 44 of the shops where the leases were up for renewal.
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