'As good as it gets on the High Street'

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A string of upbeat Christmas trading statements from major retailers was not enough to stop a stock market sell-off of retail shares yesterday as investors took profits and some analysts warned that this was "as good as it gets".

Next, Electronics Boutique, and The Peacock Group all reported solid gains in sales but saw their shares fall. "There is a feeling that it won't get much better than is, as interest rates and taxes are expected to increase going forward, Nigel Cobby, a retail analyst at Deutsche Bank, said.

Nick Bubb, an analyst at SG Securities, described some of the share price reactions as "staggering". He added: "The market is taking a churlish view saying, 'who cares about this Christmas, what about the next one with the possibility of rising interest rates and concerns over consumer spending?' But I would be surprised if this is the final verdict of the market."

Next, the fashion company, was the biggest retailer reporting yesterday and delivered like-for-like sales growth of 9 per cent in its high street stores in the 23 weeks to 5 January. Sales at the Next Directory business were up 20 per cent.

However, Simon Wolfson, its chief executive, cautioned that the current growth rates were not sustainable. "We are planning for like-for-like sales to return to more normal levels of 3-5 per cent. That it not to say we are predicting a downturn. It is a return to normality."

Mr Wolfson said Next had seen good performances in menswear, womenswear and childrenswear. "Fashion is back in fashion. Two years ago everyone was wearing cargo pants and fleeces. Now we are seeing knitwear, embroidered denim and a return to colour with red and blue selling well."

He denied Next would be a victim of the Marks & Spencer recovery, saying :"History would suggest that in the long run Next does well when M&S does well. It is good for us to have a strong high street." The shares fell 41p to 894p.

Electronics Boutique, the computer games specialist, issued the most bullish statement, with like-for-like sales up 47 per cent in the five weeks to 29 December. The growth was fuelled by the demand for the Playstation2 consoles and games, launched at the end of 2000.

The news coincided with the announcement that the company plans to change its name to Game and rebrand all of its stores under the Game brand over the next 12 months. Electronics Boutique bought the Game stores in 1999 and has been trading under both names since. The change will cost £6m. Its shares fell 4 per cent to 129p.

The discount retailer Peacock Group reported like-for-like sales up 12.6 per cent in the five weeks to 29 December. Gross margins rose 3.6 per cent, helped by better stock control which reduced the need for markdowns. Its shares closed 6p lower at 129p.

TJ Hughes, the discount department store operator that has received a bid approach from management, reported a 12.1 per cent increase in like for like sales in the six weeks to 5 January. The board indicated yesterday that it has secured financial backing for its bid, pending due diligence. The shares closed up 0.5p at 116.5p.

Asda, the supermarket chain owned by Wal-Mart, said sales of its George clothing range jumped 30 per cent during November and December. Asda is cutting prices on 100 selected clothing lines by a further 10 per cent from today.

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