Not crying wolf

4 August 2010 By Neil Collins

The perennial pessimists at Next sound gloomier than ever. If this wellrun UK clothing retailer is seeing slowing demand, others will be suffering more. As January’s rise in sales tax looms, a combination of stagnant sales and rising costs will sort out the strong from the weak.

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Next's total sales excluding VAT rose by 3.1 percent in the 26 weeks to 31 July, thanks to growth of 7.8 percent in sales from Next Directory. Likeforlike sales in the shops fell by 1.5 percent, as anticipated in the May guidance of 2.5 to +0.5 percent.

Secondhalf guidance is for total sales growth of between 1.5 and + 1.5 percent, including director sales growth of between +4 and +8 percent.

Pretax profit is expected to be between 535 million and 560 million pounds, in line with current market expectations.

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