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Last Updated: Thursday, 15 September 2005, 10:34 GMT 11:34 UK
Next sees continued tough trading
Next store front
Next says consumer spending is likely to remain weak
Fashion retailer Next has warned that the current tough trading conditions on the UK High Street are set to continue for the rest of the year.

The comments came as it reported a better-than-expected 6.1% rise in half-year profits to 172.6m ($314m).

However, like-for-like sales at its stores fell 2.9%, the firm said.

Next added that in the six weeks to 10 September like-for-like sales at its stores were down 6%, which it said was its worst performance for 10 years.

'Cautious' outlook

We have been reducing the amount of orders we've been placing with suppliers
David Keens, Next finance director

Including new store space, overall sales at Next retail in the first half of the year grew by 7%.

But the group warned that it was "very cautious" about the outlook for consumer spending in the second half of 2005.

"We think it's going to be tough all the way to Christmas," finance director David Keens told Reuters news agency.

"In recognition that sales will be tough, we have been reducing the amount of orders we've been placing with suppliers."

China quotas

Next also said that 1.5m-worth of its stock has been caught up in the recent trade dispute between China and the European Union.

The row, over import quotas, led to millions of items of clothing being held in European warehouses.

Next said that it believed it could now import most of this stock into the UK after the EU and China struck a deal.

However, the retailer warned that it now faced the problem of finding alternative sources of supply to get round the continuing restrictions on imports from China.

It said "almost all" of the new supplies of goods would still come from countries outside the EU.

"Whilst the restrictions will cause inconvenience and may prove costly to UK consumers they will have little or no benefits for European manufacturing," Next said.

Next 'cautious' over 2005 sales
23 Mar 05 |  Business
Weak end-of-year sales hit Next
05 Jan 05 |  Business

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