Next backed to weather the storm as sales fall by 5.9%
Retail giant Next is in good enough shape to overcome the challenges of its annus horribilis, it has been claimed. The clothing chain, which has around 24 stores in Northern Ireland, yesterday revealed that high street sales fell 5.9% in the third quarter.
The company said full-price sales slumped as much as 7% in August in the wake of a large end-of-season sale the month before.
But the group, which had previously warned over a "difficult" third quarter, said trading had improved since September, with full-price sales rising by 1.3% in October.
Analyst George Salmon, at Hargreaves Lansdown, said 2016 was becoming an "annus horribilis" for Next. However, shares in Next leapt 4% higher as the company's update signalled the trading slump was easing off.
Its most recent Northern Ireland opening was in Bangor's Bloomfield Centre earlier this year.
Jonathan Pritchard, at Peel Hunt, said: "Like-for-like sales are still negative, but not in free-fall, and we believe that there is pent-up demand in the clothing sector.
"These aren't vintage times, but Next is in good enough form to ride that wave."
Overall sales across its stores and Next Directory arm declined by 3.5% in the three months to October 31, with sales flat across the online and catalogue division.
Next said the third-quarter performance had marginally lowered its full-year sales expectations, with the group now forecasting a range from a fall of 2.5% to a rise of 2.5%.
Next boss Lord Wolfson said earlier this year that 2016 was set to be the "toughest we have faced since 2008'', warning over a shift in consumer spending away from fashion towards eating out and travel.
He also recently cautioned that Next may have to hike its prices by up to 5% next year as it faces surging costs from the Brexit-hit pound.
The group said the third quarter was particularly painful as it followed a "much larger" end-of-season sale in July, as well as tough comparisons from a year earlier, when September was its best month.
Fashion chains have also been knocked by an unseasonably warm start to autumn.