Next wary of tough times despite improved results
Thursday 31 July 2008
Next's chief executive, Simon Wolfson, has dashed any hope that trading conditions in the clothing sector had hit the bottom, as the fashion giant posted better-than-expected second-quarter results.
For the 13 weeks to 26 July, retail like-for-like sales fell 2.4 per cent at Next, which was better than most City analysts expected. However, Mr Wolfson said: "I think the economic risks are on the downside for the next six months. Our customers have significantly less to spend on clothing."
Asked if the retail sector was in recession, he said: "Yes, certainly on a like-for-like basis." Next said the 6 per cent fall in retail like-for-like sales for the first half of 2008 was "more indicative of the underlying trends", given the unusual weather last year. "We anticipated tough times and they have been as tough as we expected," said Mr Wolfson.
The Citi analyst Richard Edwards said: "The stronger-than-expected top line across the second quarter suggests that Next may have picked up some market share ahead of the sale period. With a deteriorating macro environment, we fear the worst is still to come with downside risk to our January 2009 and 2010 Next earnings forecasts."
Despite the downturn, Mr Wolfson vowed to press ahead with Next's investment programme. He said: "We are not cutting back on any of the areas we are investing in, such as the store refit programme. The most important thing going into a downturn is to manage stock in line with a realistic assess-ment of what sales will be." Next said stock levels heading into its ongoing summer sale were significantly down on last year.
Over the second quarter, Next grew sales at its directory business by 5.6 per cent. Next is also eyeing new international markets. Mr Wolfson said: "We continue to look at new countries to take our franchises."
- 1 The truth about 'girl things': Three cheers for Heather Watson's honesty
- 2 Man who held up 'hire me' sign at Waterloo station returns a year later with 'I'm hiring' sign
- 3 Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
- 4 Tennis fan suing Australian Open organisers for 'failing to shade spectators' during Murray match
- 5 Men behaving badly: Urinating while standing, 'manspreading' and the gendering of selfishness
Man who held up 'hire me' sign at Waterloo station returns a year later with 'I'm hiring' sign
Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
Rob Lowe hits out at White House decision not to meet Israeli leader
Iraq invasion 2003: The bloody warnings six wise men gave to Tony Blair as he prepared to launch poorly planned campaign
Winston Churchill: From accusations of anti-Semitism to the blunt refusal that led to the deaths of millions
British Muslim leaders outraged after Eric Pickles says followers of Islam should 'prove their identity'
UK terror fears: My jihadist son returned from Syria mentally scarred – now he is being ignored
Nigel Farage: NHS might have to be replaced by private health insurance
Billy Crystal: 'Stop shoving gay sex scenes in my face'
'We would evict Queen from Buckingham Palace and allocate her council house,' say Greens
French court convicts three over homophobic tweets, in case hailed as a 'significant victory' by LGBT rights campaigners
iJobs Money & Business
Negotiable: Recruitment Genius: A Tax Assistant is required to join a leading ...
£16000 - £25000 per annum: Recruitment Genius: This is an exciting opportunity...
£45000 - £47000 per annum + bonus + benefits: Ashdown Group: Java Developer / ...
£35000 - £38000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...