Next expect further downturn
September 10, 2008
The clothing retailer NEXT has given a gloomy warning that trading will not improve for the rest of the year. They also revealed that full price like-for-like sales were down 6% in the six months to July.
The company blamed the economic downturn for the fall in sales, however they tried to reassure investors by saying there would be no further deterioration.
Next expect like-for-like sales to drop between 4 and 7 % over the second half of the year.
Finance director of Next, David Keens said “Trading has not fallen off a cliff since the end of July; what we’ve seen is a similar pattern with slight disruptions because of the weather.”
He added “I don’t think it will be a lot more different ahead of Christmas, although there are fewer people moving, so we are selling fewer curtains and carpets”.
Pre-tax profits also fell in the first half, down 12.4% to £173.5 million, the business continued to be supported by the good performance of its directory sales arm.
Their shops and directory operations revenue were down 0.2% at £1.37 billion. This was helped by store openings and boosted by a willingness by customers to buy more expensive items.
Mr Keens said “The average garment selling price is up by 5 per cent and we’ve been helped because people are buying better products - more blouses and full shirts than t-shirts”.
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