Wolfson £3.7m share sale puts paid to Next bid speculation

Simon Wolfson, chief executive of Next, yesterday burst the speculative bid bubble that has inflated the value of the group by selling shares worth £3.7m.

The clothing retailer has spent the week being touted as the next private equity target amid rumours of a 2,500p-per-share bid approach that drove its shares to an all-time high of 2,353p.

Mr Wolfson's share sale killed those rumours because company executives are not allowed to deal in stock if they have inside knowledge of any imminent corporate action. As a result, shares in Next fell 5 per cent, or 112p, to 2,241p.

The 39-year-old, who was the youngest FTSE 100 chief executive when he was anointed the group's boss six years ago, sold 160,000 shares - 100,000 at 2,303p and 60,000 at 2,309p. He still owns 1.8 million shares in the retailer, all of which he purchased with his own money. This means he has £40m riding on the company's success, which has been tested of late by a resurgent Marks & Spencer.

Mr Wolfson, who abhors publicity about his private life, stands to make £2.5m from an unusual executive incentive scheme that involved the directors betting three years ago on how much the group's shares would be worth by July 2008. If the stock is worth more than 2,450p next summer. then the £500,000 bet that Mr Wolfson placed will be worth five times that amount.

Last week, Mr Wolfson said the clothing retailer needed to take more "fashion risks" and inject "magic" back into the brand, which critics felt had failed to keep pace with rivals on the high street. For this summer, this includes embracing trends such as tulip-shaped dresses, smock tops and bold, graphic prints.

The retailer is embarking on modernising its store estate, which has seemed trapped in a 1980s timewarp. It will introduce a new, lower-case logo from the autumn as well as new carrier bags. And it is spending serious cash - an extra £10m - to tell its customers about all the changes.

It was not clear yesterday what plans Mr Wolfson, who is not married, has for his windfall. Unlike many of his rival retail chief executives, he is no extrovert, preferring to spend his time running the business to running around town. He has houses outside Leicester, where Next is based, and in London. He turns 40 in October. His appointment as Next's chief executive in 2001 caused some raised eyebrows in the City because at the time his father, Lord Wolfson of Sunningdale, was the company's chairman.

Mr Wolfson, a keen Conservative supporter, recently joined an economic policy panel set up by David Cameron to work on improving Britain's competitiveness.