Wednesday 31 July 2019 9:27 pm

Buoyant Next shows retailers how it is done

Investors exposed to the troubled sector of retail property were dealt a fresh blow during trading today.

Shopping centre landlord Intu led the market fallers after it cancelled its dividend and posted mounting losses, wiping 32 per cent off an already-battered share price.

Read more: Shop prices fall as retailers tempt customers with discounts

Although Intu’s downward spiral this afternoon underlined a year to forget for many retail landlords, its boss was at least optimistic about one thing: stores are ‘not dead yet’, proclaimed chief executive Matthew Roberts. While retail real estate stocks tumbled today, one fashion tenant was certainly proving that point. 

Clothing group Next’s share price closed up at its highest price in almost exactly 12 months – capping off a year in which the fashion firm has thrived amid some of the toughest conditions ever seen on the UK high street. 

A surprise four per cent rise in full-price sales was reported by the chain, despite it facing challenging comparisons from the blistering summer weather last year. Shareholders and analysts cheered a hike in the full-year profit guidance by £10m to £725m. 

Read more: Mothercare warns of flat profits as margin recovery slows

As Shore Capital noted, “there are few retailers with upwards momentum in guidance”, but Next appears to be one of them. Online sales are looking healthy, and the rate of decline in its physical shops was not as drastic as some experts had been forecasting. 

Next boss Simon Wolfson – or Lord Wolfson of Aspley Guise to give him his proper title – may have started his Next career on a shop floor with the aim of preparing to go into management consultancy, but since taking over the fashion group in 2001, his dedication, discipline and attention to detail has won plaudits in the City. 

Today his focus on the small print once again filtered into a set of successful results; in maintaing tight stock and cost controls Wolfson proved that a high street retailer with solid management can weather the current storm blighting the retail sector.