High street lift

Next enjoys Christmas trading lift as shop prices fall

Next Straiton

Next enjoyed a rise in sales

Fashion and home furnishings chain Next has reported better than expected Christmas trading with full price sales in the period 1.1% (£9m) better than its internal forecast. 

It said the sales performance was helped by a much colder November than last year and improved stock availability in its stores and online.

Year to date sales are up 3.9% and the firm has raised its full year profit guidance by £2m (0.6%) to £727m.

Market reaction

Russ Mould, investment director at AJ Bell, said: “All the market data suggested a very difficult Christmas trading period for retailers, so how is it that Next managed to buck the trend?

“The simple answer is that growth in the online channel is boosting earnings, so weakness on the high street is less of a worry. Also in its favour is growth in full price sales, highlighting how some shopkeepers don’t have to resort to heavy discounting to shift goods.

“But there is more to the Next story than that. The company has been quietly reshaping itself to become more relevant to the modern world.

“Approximately 10% of revenue now comes from selling third party brands, 9% of revenue is generated outside of the UK and 6% comes from selling credit to customers. Shops are acting as pick-up hubs for online orders and Next has been negotiating more competitive rents when leases come up for renewal.

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