Next sees no Brexit impact as sales gain

Clothing retailer Next reported a pick up in sales in its second quarter and said it had not seen a big impact on demand so far from Britain’s vote to leave the EU.

Several surveys have reported a drop in consumer confidence following the shock Brexit vote on June 23. But so far, there have been few signs of that translating into lower spending.

In its first update since the referendum, Next said it had not seen an impact on sales, apart from in the first few days immediately after the vote.

The company reported a 0.3% rise in full-price sales in the three months ended July 30, improving on a 0.9% fall in its first quarter, which followed its warning in March that 2016 could be its toughest year since 2008 as consumer spending deteriorated.

That performance showed Next was continuing to outperform rival Marks & Spencer, which in July posted an 8.9% fall in underlying sales of clothing and home products, its biggest fall in quarterly clothing sales for over 10 years.

The company’s shares were up 4.7% at one stage yesterday, edging back towards the 5,535p level where they were trading before the Brexit vote sent them plunging as much as 35% on concerns about weaker consumer spending.

For the year ending January 2017, Next forecast full-price sales would be in a range of down 2.5% to up 2.5%, narrowing a previous view of down 3.5% to up 3.5%.

Next said it was too early to tell what the impact of the Brexit vote would eventually have on consumer demand, and blamed volatile trading on an underlying weakness in demand for clothing which dates back to last October.