Next tries to put the magic back

Retail experts have been watching clothing retailer, Next, and have been questioning whether the chain is outdated.

2007 was a tough year for the clothing chain but it has this week reported a decent Christmas trading period and looks like Simon Wolfson, chief executive, is fulfilling his promise to ‘put the magic back’.

During the period 30 July to 24 December, sales at the retailer and the Next Directory arm were up 0.3%. Like-for-like sales were down 3.2% but this was slightly better than City analysts had anticipated.

The group increased profit forecasts for the year to between £492 million and £502 million, an increase of £10 million.

The increase in profits was due to ‘not marking items down in the build-up to Christmas, and the improvement made to the brands’ said Mr Wolfson.

Broker Panmure Gordon said in a note to clients as always, Next has managed its profits well. Less good news is that it does not expect like-for-like sales to recover to positive territory in 2008/09.

Next added that it is ‘nervous, along with other retailers about the worsening environment’ and concluded whilst trading has been difficult, the financial performance has been good a result of excellent cost control and careful management of our balance sheet.

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