Boss of Next insists prices will not rise further in 2012

THE boss of clothing chain Next has offered reassurance that prices will not rise further in 2012 after a “perfect storm” of surging costs and rising VAT increased price tags this year.

The retailer, which has more than 500 stores in Britain and Ireland, hiked average selling prices by 7% in the six months to July 31 as soaring cotton and oil costs added to the British VAT hike to 20%.

Next expects selling prices to increase 8% in the second half of the year but chief executive Lord Simon Wolfson said there will not be rises in the first half of 2012 as the cotton cost bubble has burst, with prices falling 50% below their March peak.

The reassurance came as Next reported a 1.8% drop in store sales, which was offset by a 15.1% increase at its online business Next Directory. The company posted an 8.5% increase in half-year pre-tax profits to £228m (€262m) after revenues grew 3.6% to £1.6bn. Next said it did not expect an easing in headwinds in 2012, although with little or no inflation in its prices, consumer sentiment should benefit.