Next suffers in 'volatile market'

Sales at Next have again fallen sharply, the clothes retailer has warned. The company warned that sales were down 2.7 per cent, year-on-year, during the first 15 weeks of its financial year, with a particular disappointing performance over the past fortnight.

Simon Wolfson, its chief executive, said he expected sales in the first half of the year to be down by as much as 4 per cent, compared to the same period in 2006. The comparison is particularly worrying given that in last year's first half, sales were down by more than 7 per cent on 2005.

Mr Wolfson said he remained cautious about the outlook for consumer spending in the rest of the year, though better sales from Next's Directory catalogue business, up 2.2 per cent on 2006, have mitigated the retailer's problems to a limited extent. "Trade has been extremely volatile," said Mr Wolfson. "A good Easter was followed by a very disappointing first two weeks of May."

Richard Ratner, a retail analyst at Seymour Pierce, said Next's warning was more serious, given that rivals have reported stronger sales in March and April. "Next Retail's figure is worse than we were expecting," he said.