The boss of fashion chain Next has set out to ease fears about the economy after a spate of gloomy news says a report in the Leicester Mercury
Lord Simon Wolfson, chief executive of the Enderby group, said some experts were over-playing worries about poor growth and impact of the euro debt crisis on the UK.
He said sharp falls in the cost of cotton and the lessening impact of the VAT rise were reasons to be more optimistic.
“I don’t think it’s as half as bad as commentators have made it out to be,” said Lord Wolfson.
“The economy will continue to be squeezed but the fact that input prices have stabilised is going to make things a bit easier next year for clothes retailers.”
Next yesterday reported that total sales in the six months to July 30 were up 3.2 per cent compared with the same period last year.
However, store sales were 1.7 per cent down, while Next Directory – the group’s mail order and internet arm – saw a 15.1 per cent increase.
The retailer said it was still on track to make a record annual profit for the third consecutive year and said the figure could now be as high as £616 million.
However, this is mainly because of the cash it received from last month’s sale of its Ventura call centre business to outsourcing specialist Capita. Next made a profit of £551 million last year.
Lord Wolfson’s upbeat mood came after he said prices in Next’s spring collection would not rise, after a fall in the cost of cotton.
Poor cotton harvests in Asia led to prices increasing by eight per cent late last and early this year but the recent decline will begin to be felt in stores early next year.
Meanwhile, the affect of January’s increase in VAT from 17.5 per cent to 20 per cent will no longer impact on inflation from January.
This means shoppers will not notice it as much.
Next, which has about 525 stores, employs 3,500 people in Leicestershire.