What's Next? Woes for high street stalwart Next set to continue with sales drop

 
Helen Cahill
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In March Next announced its first fall in profits for eight years (Source: Next)

Next is expected to report another fall in sales this week as it struggles on in the increasingly hostile retail environment.

Analysts at Investec are expecting Next to announce a three per cent fall in sales for the second quarter, which comes after a three per cent fall in the previous quarter.

Next trimmed the top-end of its profit forecast in May, saying that profit for the year will fall by 6.4 per cent to £740m. It had previously forecast profits to come in between £680m and £780m.

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Investec analyst Alistair Davies said that Next was battling "weak footfall, range gaps, the sector's transition online and a softer homewares market".

Retail sales are expected to drop by 8.8 per cent, but it is thought online sales will rise by 5.2 per cent.

However, Next was well-positioned for the longer term, Davies added.

"Next proactively manages its store estate through a combination of profitable openings, extensions and closures," he said. "In addition, it has the operational flexibility to close space quickly, at limited cost."

This means Next will be better than its peers when dealing with the switch to online trading, he said.

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