S&P nicks Next

S&P said it downgraded Next plc’s ratings to BBB- from BBB and placed them on CreditWatch with negative implications.

“The downgrade reflects our view that Next's sales, earnings, and cash generation will decline sharply, at least over the rest of 2020. We believe the coronavirus outbreak will cause a substantial decline in nonfood sales in the United Kingdom and also internationally, as a result of the government's mandate that shops selling nonessential goods including clothes should be closed. Next has also recently stopped taking online orders until further notice,” said S&P in a press release.

The placement reflects downside risks given the unknown duration of the coronavirus pandemic and if it will last beyond the second quarter, S&P said.

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