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Next reports solid rise in sales after shunning Black Friday

Next has allayed fears of a difficult Christmas for the high street amid widespread discounting by reporting a solid increase in sales.

The FTSE 100 high street retailer said that sales rose 2.9pc year-on-year between October 28 and December 24, which was at the top end of City expectations.

The figures from Next provide the first evidence that the high street enjoyed a better Christmas than feared. However, the retailer has consistently outperformed its rivals in recent years and avoids discounting products until after Christmas, shunning the Black Friday sales.

The performance of Next over Christmas means Lord Wolfson, chief executive, increased the forecast for the company’s annual profits by £5m.

Lord Wolfson said: “The economic outlook for the UK consumer looks relatively benign. Low inflation, an end to real wage decline, healthy credit markets and strong employment all paint a somewhat more positive picture than recent years.

“However we remain very cautions in our sales budgets for the year ahead. In Spring and Summer the Company will face very tough comparative numbers.”

Nick Bubb, retail analyst, said: “Just like last year, Next has managed to allay fears about the impact of the apparent discounting frenzy pre-Xmas on the high street.”

Neil Saunders at Conlumino added: “Kicking off the festive reporting season, Next has posted a solid set of numbers, especially so given that they are measured against some tough year on year comparatives.

"The figures are a vindication of Next’s refusal to engage in pre-Christmas discounting, including the popular Black Friday event. While this may have cost Next some sales growth over the reported sales period, we believe that it has not lost it much, if anything, in terms of profits.

“In many ways, the Next figures reflect the wider trend of Christmas, namely that the high street performed reasonably but was saved by online and multichannel which boosted retail sales. Next’s multichannel proposition is well developed and allows customers to seamlessly shop across stores and online - this stands in contrast to some of its rivals in the clothing space.”

Source : Graham Ruddick - The Telegraph
www.telegraph.co.uk/finance/newsbysector/retailandconsumer/11317051/Next-has-strong-Christmas-after-shunning-Black-Friday.html

30 December 2014

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