Next warns of first rise in clothes prices for 15 years
Thursday 16 September 2010
Next chief executive Simon Wolfson has warned that prices on the high street will rise next year, with the tough economic conditions ushering in a "new consumer environment".
Lord Wolfson cautioned that the Government's spending cuts, the forthcoming hike in VAT and a rise in cotton prices meant "next year will be the first time the clothing industry will have to lift its prices in 15 years". Clothing prices could rise by up to 8 per cent, he said. This echoed comments by the discount fashion chain Primark earlier this week.
Next, which has more than 500 stores around the country, posted a "robust set of results in trading conditions that remain testing". Revenues rose 5 per cent to £1.5bn in the first half, while profits were 15 per cent higher at £213m. Sales on the high street were at the lower end of guidance, but this was balanced by outperformance at the Next Directory home shopping arm.
Lord Wolfson said it had been a good first half, but added that sales growth would slow. "We are entering a different type of consumer environment," he said. "The glory days of inexorably growing consumer credit and inexorably growing government spending has come to an end."
The UK economy was unlikely to see a double-dip recession or a meltdown in consumer spending, Next said, but there could be up to five years of sluggish growth. Lord Wolfson said: "We will have to adapt to a new type of consumer environment, one in which like-for-like sales growth is likely to be low for some time and top line growth will need to come from other opportunities. We believe it is sensible to view this environment as the new normal."
Fellow retailer French Connection also reported it was "back on track" after swinging into profit, following losses at this time last year.
- 1 Mario Balotelli: Staff at arson-hit Manchester Dogs' Home convinced Liverpool striker is behind five-figure donation
- 2 Friends 20th anniversary: Alison Jackson photographs reunited cast
- 3 A bottle of wine a day is not bad for you and abstaining is worse than drinking, scientist claims
- 4 The response to my Pizza Express review has been overwhelming, and taught me a lot about journalism
- 5 Free U2 album: How the most generous giveaway in music history turned into a PR disaster
Scottish independence: Despite defeat history may still point to Alex Salmond as the victor
Scottish independence referendum: Frankie Boyle reacts to nation's 'No' vote - 'To be fair, I've always hated Scotland'
Iranian blogger found guilty of insulting Prophet Mohammad on Facebook sentenced to death
Scottish referendum: Police struggle to control Unionist rally in Glasgow's George Square
Hitler’s former food taster reveals the horrors of the Wolf’s Lair
Daniele Watts: Django Unchained actress detained by Los Angeles police after being mistaken for a prostitute
Scottish independence referendum: A nation divided against itself
Scottish referendum results: Cross-party consensus collapses amid Tory-Labour spat on the 'English question'
Scottish independence: David Cameron is becoming the 'George Bush of Britain'
Russia freezes Ukraine into submission: Kiev admits country doesn't have enough fuel for winter
Scottish independence: The Queen breaks silence on referendum debate – as think tank warns of £14bn black hole if Scotland votes Yes
iJobs Money & Business
£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...
Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...
£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...
To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...