Next shares suffer as sales growth slows 5%

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The Independent Online

The high street delivered a mixed message yesterday after Next, Britain's third-biggest clothing retailer, revealed a sharp slowdown in sales growth while Selfridges showed signs of recovering after the collapse in visitors to London hit its business.

Next disappointed the City with a 5 per cent rise in underlying sales for the first 15 weeks of its financial year, which compared with an increase of 7 per cent over the first seven weeks. Its shares, which recently hit a new peak of just over 1,100p, plunged 51p to 1,050p.

While a number of retailers including Marks & Spencer have cautioned that the recent rate of sales growth is unsustainable, analysts said the high street was still strong. "The consumer background remains the same. The consumer is definitely still spending," said John Baillie, a retail analyst at SG Securities.

David Keens, Next's finance director, put the fall in sales growth down to a strong May 2001. He said the 7 per cent growth at the start of the year was "exceptional", adding: "We've always said we're looking for three to four per cent growth in the long term and that anything on top is a bonus."

Selfridges, the department store group that suffered from the drop in tourism following the 11 September attacks in New York, said that sales at its flagship Oxford Street store in London had grown by 5 per cent in the first 14 weeks of its financial year.

The group said that plans to open a new store in Manchester City centre in September and one in Birmingham in autumn 2003 were on track. "[They] will provide a step change for the business as Selfridges builds a national brand," it said.

Selfridges, which saw its shares rise by 3.5p to 335p, said it remained "confident" about its full year results. It added that there was no need for a mid season sale.

N Brown, the catalogue group, also saw its sales growth slow on the back of strong comparisons. Sales rose by 6 per cent in the first ten weeks of its financial year.