Wednesday, 7 November 2007

Next blame rising mortgage repayment for performance

Next, today said that like-for-like sales for the 14 weeks to November 3 rose just 0.4% as it cited customers' rising mortgage repayments as contributing to poor performance over the last three and a half months. In its retail business, like-for-like revenue fell by 2.9% but in its Next Directory catalogue business sales rose by 1.2%. Shares in Next fell by 2.49% to £20.01. In the six weeks to September 8, total sales had fallen more sharply by 2.9%, with like-for-like retail revenue declining by 4.8% and sales from Next's directory business declining by 2.9%.

Simon Wolfson (pictured), Next’s chief executive warned in September that the increased interest rate, which has risen five times since August 2006, would begin to significantly impact shoppers’ spending by the end of the year, coinciding with the important Christmas period. Mr Wolfson said today: “Whilst we are happy that we have made significant improvements to our product ranges, marketing and stores we remain cautious about the consumer environment, with many customers now experiencing considerable year on year increases in their mortgage repayments.”

Next said that whilst "the outlook is uncertain", it still expects to meet market expectations. Next like-for-like retail sales will fall between 1% and 3.5% while the directory business will show flat sales or rise by 2%. (source: Timesonline)

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