Retail shares hammered as Next warns of tough 2016
Published 25/03/2016 | 02:30
Next, Britain's most successful clothing retailer of the last decade, warned that 2016 could be its toughest year since 2008 as the outlook for consumer spending has deteriorated.
Next, which trades from over 500 shops in Britain and Ireland, lowered its sales and profit guidance for the second time in three months yesterday, forecasting 2016-17 profit could fall by 4.5pc in its worst case scenario of a 1pc sales fall. Its shares slumped by as much as 13.4pc. Those of rivals Marks & Spencer, Debenhams and Primark-owner Associated British Foods fell 4.3pc, 3.1pc and 4.1pc respectively.
While Next blamed a worsening economic environment for the downgrade, analysts said it also reflected company-specific problems, including competition from the likes of Inditex, H&M and solely online players like ASOS.
Chief executive Simon Wolfson, a member of Britain's House of Lords and a prominent supporter of the Conservative Party, said he did not believe uncertainty surrounding the outcome of a June 23 vote on Britain remaining in the EU was influencing consumer spending.
"I don't think anybody consciously says 'look I'm not going to buy that dress because we might leave the EU'. My instinct is that it's not affecting consumer sentiment," he told Reuters.
Mr Wolfson favours Brexit but says Next is completely neutral on the matter. (Reuters)