Clothing chain Next falls out of fashion: Retailer plays it safe in forecast
CLOTHING chain Next fell out of fashion with investors yesterday - lowering its annual sales outlook as some collections fell short of last year's high standards.
The FTSE 100 retailer broke the £4billion sales barrier for the first time last year after a 7.2 per cent increase, while underlying pre-tax profit was up 12.5 per cent to £782.2million.
Chief executive Lord Wolfson, pictured below, said improving the design of its ranges had paid off with successful spring and summer collections across womenswear - clothing, shoes and accessories - menswear, childrenswear and home.
But, for this year, he said: "While we are happy with most of our current ranges, we recognise some collections are not as strong as they were at this point last year.
"In addition, during the spring and summer seasons, we face very tough comparative numbers from last year, when sales were assisted by unusually warm weather."
Next is currently budgeting for full price sales growth this year of between 1.5 to 5.5 per cent, down from previous guidance of 2.5 to 7.5 per cent, with annual profit forecast to be between £785million and £835million.
It is building hub warehouses in China, where it launched last year, and Russia to improve delivery to customers buying online in those countries.
Wolfson said sales had started slowly in China but were now exceeding expectations. International online sales are set to grow by 25 per cent to about £205million this year.
He said the outlook for the UK looked "benign" adding: "Low inflation, an end to wage decline, healthy credit markets and strong employment paint a positive picture." Shares fell 305p to 7315p.
