Black Friday's huge discounts are pointless says Next boss Lord Wolfson

 

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The Independent Online

Offering huge discounts in the run-up to Christmas on Black Friday is pointless for retailers, the boss of one of the UK’s biggest fashion chains has said.

Lord Simon Wolfson, chief executive of Next, said his company has no plans to copy competitors which held one-day sales just weeks before Christmas, and he revealed that Next’s own sales actually rose this year on the final Friday in November.

He said: “Black Friday didn’t have a negative impact. We had a really good day with people taking time off to go shopping. There’s so much business to do during that period so it just doesn’t make sense to get involved.

“I think retailers have to stick with their approaches because it gives customers confidence [to know that] when they pay full price [for an item] it won’t suddenly be on sale a few weeks later.”

The Conservative peer added that he does look at rivals to see what trends are being sold, but that he has no plans to start copying their business models.

His comments come as he revealed a steady set of festive sales figures since a shock profit warning this year, after one of the warmest autumns on record, left the company with excess winter stock.

Sales rose 2.9 per cent in the 58 days to 24 December, at the upper end of expectations, thanks largely to a strong rise in Next Directory catalogue and online sales, which rose 7.5 per cent. Store sales managed only a 0.5 per cent rise.

Next is the first high-street retailer to give the City an idea of whether the past three months – during which some retailers can make up to 75 per cent of their yearly profits – will turn out to be a “Golden Quarter” for stores.

Investors seemed impressed, sending shares in the retailer up 210p at 6725p, as the company also revealed that full-year pre-tax profits are likely to be within £10m either side of £775m – an 11.5 per cent increase on last year.

Lord Wolfson revealed that another special dividend would be paid out to shareholders at 50p a share, costing £75m, as the company continued its policy of not buying back and cancelling shares while the share price is about £64.25. As a result of this approach, the company has returned £361m of surplus cash to shareholders this year.

Online sales have been particularly strong for Next this Christmas, with people leaving online orders until the last minute.

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