Next boosted by sales rush
NEXT, the high street clothing retailer, yesterday brought some sunshine to the City by raising its annual profit forecast by £30m in an early trading update.
Chief executive Simon Wolfson said: “Six months ago we were billed as optimists for saying the world wasn’t going to end. And it hasn’t.”
The fashion chain, which has around 500 stores across Britain and Ireland said that warm weather had boosted summer clothes sales by two to three per cent. The knock-on effect of shoppers stocking up on shorts and sandals lifted total Next sales by 1.4 per cent. Like-for-like sales were down by 1.9 per cent, an improved performance from the four to seven per cent fall it forecast in May. The group’s Next Directory sales lifted by 1.3 per cent.
As a result of the improved trading Next said it now expects to make £15m more profit that it has previously forecast in the first half of this year. And the group added £15m to forecasts for the second half due to sourcing and product negotiations outperforming expectations.
Wolfson said the group’s strategy of holding back on frequent price-slashing promotions and instead sticking “religiously” to its end of season sales had paid off.
Wolfson rebuffed the doomsayers saying: “If you relied on markets you would think the worst, but the underlying reality is there has been just a modest consumer downturn.”
He added that sales of the ranges Next provided to shoppers were dictated “by fashion, not economics”.