Sunday 19 November 2017

Shares fall as Next faces tough 2010

Shares in Next fell 2.4pc in London yesterday
Shares in Next fell 2.4pc in London yesterday
John Mulligan

John Mulligan

Shares in Britain's second-largest clothing retailer, Next, fell 2.4pc in London yesterday after the company's chief executive Simon Wolfson warned of a tough 2010 even as sales over Christmas beat expectations and he upgraded the chain's full-year profit range.

One of a slew of retailers that were kicking off a post-Christmas trading update period, Next said the consumer environment in Britain had been "more stable than expected", helping to boost sales in the run-up to the retail sector's most important part of the year. Cold weather also helped, it said.

Total sales, excluding VAT, were 4.6pc higher in the 22 weeks up to Christmas Eve, while like-for-like sales were up 3.2pc. The company's forecast for its full-year pre-tax profit range was upgraded to £490m -£500m (€546m-€557m).

Its trading statement noted that it was "particularly hard" to gauge the year ahead.

"Consumers are generally in a much better position than they were a year ago," said Next.

"Low interest rates have enabled those in employment to service their debts and increase their savings -- in November and December we saw a marked decline year on year in the number of our customers falling into arrears."

Next's performance over Christmas comes as high-end retailers, including jewellers Boodles, reported strong sales growth in the pre-festive period as customers splurged.

Like-for-like sales at department store Fortnum & Mason, which counts many members of the British royal family among its regular customers, rose 10pc in the first three weeks of December, helped by weak sterling and what it described as "frugality fatigue".

Boodles, which has an outlet in Dublin, said like-for-like sales rose 23pc in December.

Department store chain John Lewis, which is owned by its employees, reported a 12.7pc rise in like-for-like sales in the five weeks to January 2, with strong performances from electrical, home and beauty products.

However, it is forecasting a slow recovery for Britain's retail sector this year. John Lewis also owns supermarket chain Waitrose, which it said had increased sales by 16.1pc in the 13 weeks ending December 26.

Irish Independent

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