Hot weather cools profits at Next

Next, the high-flying retailer, surprised the stock market yesterday with figures showing a weak August due to the hot weather, higher returns from its summer sale and the half-day closure for Princess Diana's funeral.

However the group said that though the figures forced profits downgrades and were out of line with strong official retail statistics for the month, it believes it has not lost its touch.

Next's announcement that sales in the six weeks since the end of July were just 10 per cent ahead of the same period last year on 8 per cent more space forced the shares down by around 40p in early trading. However, the stock recovered to post a 7p gain to 735.5p.

"We don't believe the Next bubble is going to burst on the basis of six weeks' figures," said chairman Lord Wolfson. Lord Wolfson said mourning for the death of Diana, Princess of Wales, cost the group around pounds 3m of sales in August. But the greatest impact was the hot weather, which encouraged shoppers to sunbathe instead, and a high level of returns from the Next summer sale.

The current trading statement overshadowed Next's half-year figures which showed that pre-exceptional profits rose from pounds 56m to pounds 67.3m. Thestores reported a 20 per cent increase in profits to pounds 36m. Next Directory, the mail order catalogue, also did well with profits up from pounds 11.8m to pounds 15.8m.

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