Fashion and homewares retailer Next sees sales and margins falling further in 2009, it said today as it posted an expected 13.9 per cent profit decline for the past year.
Shares in Next, which have lost 19 per cent of their value over the last three months, were down 2 per cent at 1264 pence at 8.30 am, valuing the business at £2.50 billion pounds.
The group said it was budgeting for like-for-like sales to fall between 6 and 9 per cent at its stores chain Next Retail in its first half to the end of July, with operating margins falling by around 3 per cent to about 10 per cent.
At the catalogue and online business Next Directory it forecast sales would be flat to down 2 per cent, with operating margins broadly flat at around 19 per cent.
Next, the UK's second-largest clothing retailer by sales value, reiterated it expected significant upward pressure on prices and downward pressure on margins in the second half of the current year as a result of sterling's weakness.
Chief executive Simon Wolfson said the group would have no alternative but to raise clothing prices by between 3 and 5 per cent.
Many UK retailers have been struggling as indebted consumers rein in spending amid soaring unemployment, sliding house prices and fears of a deep recession.
Next, which trades from over 460 stores in the UK and Ireland, said it made a pre-tax profit of £428.8 million for the year to the end of January 2009.
Revenue fell 1.7 per cent to £3.27 billion and the total dividend was maintained at 55 pence.
Net debt was reduced to £629 million, with the group having debt facilities in excess of £1 billion.
Reuters