Next adds to retailing industry gloom

There is more doom and gloom on the High Street today after clothing retailer Next said like-for-like sales in the 14 weeks to 1 November were down 4.4% compared with the same period a year ago.

The news comes after Marks and Spencer, Britain’s largest clothing retailer, reported a 34% fall in half-year profits yesterday.

Third-quarter sales at the Next Directory catalogue and online business were up 2.1% compared with last year, leaving group sales ahead 0.9%.

As the country enters a recession, consumers are tightening their purse strings and, as a result, the High Street is suffering.

The fashion chain has warned that trading during the festive period could be challenging and Simon Wolfson, Next’s chief executive, said that sales will fall by between 4% and 7% over the autumn and winter period.

The outlook for consumer demand next year is mixed, said Mr Wolfson, adding that the positive is lower interest rates, falling fuel and food bills may help shoppers.

However, the negative is that rising unemployment will reduce earnings, and falling house prices may encourage people to save more, he added.

Meanwhile, competitors such as Primark who offer low-cost clothing are bucking the trend in the retailing industry with a rise of 4% in like-for-like sales in the year to September 13.

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