Next curtails interest-free credit to customers ahead of Brexit

Clothes and furniture retailer Next was forced to cease offering interest-free credit to customers after Barclays bank abruptly pulled its support citing Brexit concerns.

At its Dublin furniture store, Next offered the interest-free credit deal to consumers. And while most of Next’s commercial consumer credit is funded by the company, on this occasion it was being funded through Barclays.

As a result of internal advice at the bank, it pulled the offer despite it being Next’s intention to continue offering the interest-free credit deal.

The Irish Times understands Next had agreed to offer the deal up until the Brexit date of March 29th but, on short notice, Barclays pulled its support and the offer ceased last Saturday.

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“Next wants to continue offering interest-free credit in the Republic of Ireland” and so is “actively looking for another provider so they can reinstate the offer”, a company spokesman said.

‘Material threat’

Next, which has 28 stores in Ireland, noted in a September trading statement that while it was doing considerable work to prepare for Brexit, it didn't believe a no-deal Brexit in particular would "pose a material threat" to its £190 million (€212 million) turnover business in the EU.

The British retailer recently reported a 1 per cent rise in sales in the run-up to Christmas, confounding fears of poor festive trading. However, it cut its profit guidance for the year to £723 million from £726.1 million.

While Barclays pulled its finance offering from Next, a spokesman for the retailer said it isn’t an isolated incident and that banks have been reigning in their credit facilities as the Brexit date looms. Barclays did not respond to request for comment.

It’s unclear whether other retailers operating in the Republic have been affected by the bank’s move.