British clothing retailer Next Plc, which has a number of Irish outlets, trimmed its full-year profit forecast this morning, blaming a slower than expected post-Christmas stock clearance and said a consumer spending slowdown would hit growth in 2005.
"We are cautious about the outlook for the coming year -- there will be growth in consumer spending but it will be modest, very modest. That's what we're planning for," said Chief Executive, Simon Wolfson.
Analysts are concerned that recent interest rate increases, a reluctance among consumers to take on new debt and falling house prices will rein in retail spending, long the driving force behind UK economic growth.
"We think the prospects for like-for-like growth in the coming year will be subdued," Wolfson said, but added the company expected margins to be broadly unchanged.
Next shares, which outperformed the FTSE retailers' index by about 30 percent in 2004, opened 2.9 per cent lower at 1633 pence.
Next, which sells mid-price fashion and homewares through more than 350 stores and its Directory catalogue business, said same-store sales in the period from August 3rd to December 24th rose 2.9 per cent, with total retail sales up 12.1 per cent.
But the company lowered its internal target for full-year pre-tax profits by £5 million sterling to a range of £415 million pounds to £425 million, saying the post-Christmas clearance sale had not been as brisk as expected.