Next has issued a lengthy trading update warning that the fall in sales as a result of the coronavirus has been “faster and steeper” than it anticipated in March.

In a note to the City today, the fashion giant said the effects of the coronavirus had been worse than anticipated on its revenues, and the brand was now anticipating lower sales for both the first and second halves of the year.

For the year to April 25, full-price retail sales have fallen 52% and online sales 32%, while total full-price sales including interest income have fallen 38%.

In its revised stress test from March, Next said the effects of the coronavirus will “be felt for longer than we first anticipated” and sales “will be disrupted even after full lockdown measures have lifted”.

Next set out a revised full-price sales scenario, which modelled full-year falls from 30% to 40%.

The retailer said it would also face a challenge with surplus stock and, while its predominant sales periods in July and January will likely fall outside of lockdown, it is forecasting sales declining 11% on last year.

To offset this, Next said it had identified areas where it could achieve higher cost savings and stock cancellations than originally outlined in March. It also increased its cash resources through the sale of assets and by suspending share buybacks and dividend payments.

It also said it had agreed to waive financial covenants on its revolving credit facility with its banks for this year and secured additional borrowing facilities through the government’s Covid-19 corporate financing facility, which Next said it did not anticipate having to use.

The retailer said since it reopened its warehouse picking operation on April 14, it has “steadily increased the numbers of people working” in those operations and is targeting 70% of normal capacity levels “within two weeks”.

In terms of warehouse staff, Next said 76% are currently able to work, with 10% limited by childcare and 14% either vulnerable or living with vulnerable people.

Next have also set out some plans for future store reopenings as lockdown measures begin to ease in a “socially distanced world”.

The retailer said it would be “better able to adapt” its larger stores for social distancing and so will prioritise those for reopening ahead of smaller stores.

Despite all the challenges, Next said it believed “the finances of the company are as secure as when we announced in March, if not more so”.

Coronavirus: Next’s Lord Wolfson on cash, customers and trading safely