As retailers begin to post their Christmas sales, a picture of a tough
holiday season has begun to emerge, as Next’s figures showed it struggled
in the 60 days trading to December 24.
Phrases such as ‘unseasonably warm weather’ and ‘lacklustre sales’ will
become familiar lines over the coming weeks on both sides of the Atlantic
as Next saw its share price fall 3.3 percent in early morning trade.
“We believe the market will take today’s statement as possibly an early
indicator that trading for apparel retailers was challenging in the final
quarter of 2015,” said Shore Capital in a note Tuesday morning.
Next was the first big gun out of the starting block posting a 0.5 percent
fall in store sales and sharp slowdown in its Directory online and
catalogue business, up just 2 percent, but its trading woes were compounded
by poor stock availability from October and tougher online competition.
Anusha Couttigane, Senior Consultant at Conlumino stated: “Over the last
few years, we have become accustomed to hearing Next heralded for its
enviable sales performance, so growth of less than 1.0 percent is
unsettling. While weather woes were experienced across the fashion sector,
delaying uptake of winter coats and warmer layers, Next also admitted that
poor stock availability intensified the issue, resulting in a failure to
meet demand for its most popular lines. This is a problem it has tried to
rectify over the last two years by taking more risks and buying closer to
the season, however it clearly requires further investment.”
Image:Next