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Next blames warm weather for ‘disappointing’ sales

next shop frontHigh Street retailer Next, which has its headquarters in Enderby, has blamed the warm weather in the final few weeks of last year for a “disappointing” trading performance in the run-up to Christmas.

A news item on the BBC website reports the company also said trading at its Next Directory online and catalogue operation had been difficult, due in part to poor stock availability.

Between 26 October and 24 December, sales at its High Street shops fell 0.5%, but rose 2% at the Directory arm.

Next, whose shares closed down 4.6%, lowered its full-year profit estimate.

The company, which has more than 500 stores, says it now expects annual pre-tax profits to be about £817m. This is at the lower end of its previous guidance issued in October, when it predicted profits of between £810m and £845m.

The retailer, which did not take part in some of the heavy discounting sales events at the end of last year, said in a statement:

“We believe that the disappointing performance in the fourth quarter was mainly down to the unusually warm weather in November and December.”

The statement also pointed to “mistakes and challenges” faced by the business.

“Specifically, we believe that Next Directory’s disappointing sales were compounded by poor stock availability from October onwards.”

In addition, Next said that online retailing was becoming tougher as competition intensified.
Nevertheless, the company said full-price sales for the year-to-date were 3.7% ahead of last year, just below the bottom end of Next’s previous guidance of a 4%-6% rise.

Tough market
Analysts said the figures, the first winter trading update from one of the big retailers, suggested other High Street firms may have struggled.

Neil Saunders, from retail analysts Conlumino, tweeted:

“Next’s lacklustre results do not bode well for the rest of the High Street; warm weather was the main source of its woes.”

Maureen Hinton from retail consultancy Verdict told the BBC that the results indicated a “very tough” market.

However, Phil Dorrell, a director at Retail Remedy, told the BBC that the figures were “pretty positive” for Next.

He told BBC 5 live that after other retailers have released their Christmas sales figures, the view could be: “Wow, Next did really well.”

The BBC also reported Mr. Dorrell also said he expects other high street giants like Marks and Spencer to report a decline in sales for the Christmas period when figures are released later this week

Source: http://www.bbc.co.uk/news/business-35230418

Photo: BBC

NEXT

NEXT Highcross Leicester

Next profits set to pass £750m

NEXT Highcross LeicesterNext says it is on course to make profits of three-quarters of a billion pounds this year as it benefits from a strengthening economy.

Speaking to the Leicester Mercury’s Business Editor Ian Griffiin, in an interview published on 21st March, the Enderby fashion giant gave its most upbeat forecast for at least five years.

The company said sales could rise by up to 8 per cent in the year to January 2015, with profits of up to £770 million.

The group revealed pre-tax profits rose by 11.8 per cent to £695 million in the 12 months to January – a fifth consecutive year of record profits.

Total sales were 5.4 per cent higher, at £3.7 billion.

Chief executive Lord Simon Wolfson said:

“It’s very, very difficult to forecast, but my feeling is things are getting better.

“If you look at the indicators in the economy, employment is getting stronger and credit is rising.”

Last year’s performance means 32-year-old Next looks set to make more annual profits than arch-rival Marks & Spencer for the first time.

The 130-year-old high street icon is forecast to post pre-tax profits of £626 million in the year to the end of March.

However, Lord Wolfson declined to be drawn on what many would see as a symbolic marker.

“We don’t comment on competition,” he said. “What we are really competing against is our own numbers from last year. That’s what the shareholders care about.”

The shareholders would also see that Next’s shares rose 2.28 per cent yesterday to £67.30 – a price more than 50 per cent higher than a year ago.

As ever, growth in Next’s online trading massively outstripped the sales rise at the group’s 541 stores.

Sales at the fast-growing Next Directory – where 90 per cent of sales are online – rose by 12.4 per cent to £1.19 billion, compared with a 1.7 per cent rise for its stores.

The ever-cautious Lord Wolfson said there was a good possibility the strength of the recovery would be sustained. He said:

“Conditions are likely to remain far from buoyant and there are real risks to the sustainability of the current recovery”.

Chairman John Barton said:

“The year to January 2014 was a great year for Next.”

Read original news item on Leicester Mercury website here 

Read more in Leicester Mercury Business Monthly:
So, what’s in store for Next’s chief executive Lord Simon

Next recalls T-shirts after harmful substances found

T shirt
T shirt could cause skin irritation

Clothing giant Next is recalling two batches of children’s T-shirts after they were found to contain harmful substances.

Parents who have bought either of the two items, part of the retailer’s Young Boys collection, are being asked to return the clothes immediately.

Local media* reports that the Enderby-based company has issued a safety announcement informing shoppers that the printed T-shirts contain a quantity of a “restricted substance” which exceeds an “acceptable level”.

The safety announcement, issued on April 3, indicated that it could cause skin irritation in young children.

The clothes are aimed at boys aged between three months and six years.

A Next spokesman said:

“We test all products to ensure compliance to strict safety requirements. “In this case, our initial tests showed the product complied. However, subsequent random testing has shown that some of the stock did not meet our strict safety requirements and we now have to take this up with the manufacturers concerned. “While further testing is going on, we felt the best action for our customers was to remove the product from the shelves as a precaution.”

Next would not say how many products were being recalled.

Business leaders said the issue would cost the company, but consumer safety had to come first.

If you have any questions about the recall, ring Next customer services on 0844 8448911.

 

*Read more: http://www.thisisleicestershire.co.uk/Clothing-giant-recalls-T-shirts-harmful/story-18674116-detail/story.html#ixzz2QF4JMmEk

Next expansion hindered by Council delays

Enderby based Next has voiced criticism over delays it is experiencing in its plan to create hundreds of jobs by opening new stores across the country

The company wants to open up to 17 major units, combining fashion, homeware, gardening and DIY products under one roof.

Two prototype stores have already proved a success with another due to launch next spring – and bosses are keen to roll out the concept across the country. Securing planning consent from the relevant local authorities on some of the sites is being cited as the problem.

The firm’s finance director, David Keens, told local media:

“We are looking at up to 17 other sites and would like to open these over the next five years, creating hundreds of jobs,” he said.

“We have identified sites, we now need to talk to the owners of these sites. Most of them already have buildings on them, and most of them have the relevant permissions.

“The issue with some is it’s taking much longer than we would like to get through the council process and getting the permission to get these sites up and running.

“It’s well known there’s a difficult economic environment, so why should it take so long when you have a company that’s expanding and wants to create jobs?”

Mr Keens went on to say that the programme was the next big move for the company, with room for 20 units over the next 5 years.