CLOTHING retailer Next admitted to “disappointing” sales at its high street stores and warned yesterday that growth this year would be modest, citing concerns over the Eurozone debt crisis and rising unemployment.
Its shares fell by four per cent yesterday after chief executive Lord Simon Wolfson said it was on track to meet profit forecasts for 2012 but expressed caution over its prospects for the following year.
He said: “Despite a good final week before Christmas, November and December sales were disappointing given that snow adversely impacted sales in 2010.
“A number of factors have subdued sales in the final quarter and it is hard to judge to what extent warm winter weather and higher levels of competitor discounting masked the deeper, longer lasting, economic effects.”
Kicking off the Christmas retail reporting season, Next said total sales, excluding VAT sales tax, climbed 3.1 per cent in second half of the year to 24 December compared with last year.
The retailer, which has a long standing policy of not starting its January sale before Christmas, said sales at its over 500 stores in the UK and Ireland fell 2.7 per cent. But this was offset by a 16.9 per cent rise in sales at its home shopping service Next Directory.
Next said profit before tax would only be slightly up on this year, and the firm expects £200m surplus cash after investment, tax and dividends.
A bellwether for the industry, Next’s statement sets a gloomy tone for rival updates from the likes of M&S.
• Privately-owned Aurora Fashions, which runs high street chains Oasis, Coast and Warehouse, bucked the gloomy trend as it reported a 13 per cent jump in like-for-like sales over Christmas.