Next blames cautious shoppers for sales slowdown

Clothing retailer Next today blamed cautious shoppers for a slowdown in sales at its high street stores since January.

The group cited an “underlying easing of consumer demand” for its poor performance and did not expect any big improvement in economic conditions for the next six months.

Like-for-like sales in the 279 stores that were not affected by new openings declined 0.9% in the seven weeks to March 20 compared with growth of 3.6% during the previous year.

Next, which joins photographic specialist Jessops and health and beauty chain Boots in reporting a sales slowdown, admitted that some of its ranges were also underperforming.

Details emerged as the company announced an 18% rise in pre-tax profits to £423m (€610m) for the year to January 31 on turnover that was 13% higher at £2.86bn (€4.1bn).

Profits were at the top end of hopes after analysts revised their numbers following a downbeat trading statement from the Leicester-based group at the start of 2005. Next guided the market towards a lower figure after being forced to slash prices to clear excess stock.

Chief executive Simon Wolfson said today that rising costs meant a “more conservative approach” to price cuts was now necessary, although Next would stick with its strategy of opening new stores.

He added: “We will place even greater emphasis on controlling costs in the business but will not sacrifice the long term prospects of the Company in return for short term cost savings.”

Total sales from its retail arm since January were 8.2% ahead of the previous year, with sales at its Next Directory catalogue business ahead by 10.4%.