Next enjoying soaraway summer as warm weather and April pay rises boost demand for fashion
In fashion: Next said trading over the past seven weeks had been ‘materially better’ than expected
Sales at Next are soaring as the warm weather and chunky pay increases boost demand for fashion. The retailer said yesterday that trading over the past seven weeks had been ‘materially better’ than expected. Sales over the period were £93million higher than forecast in May, when it warned of a 5 per cent slump in business.
Instead, sales rose 9.3 per cent. Next said sales over the full year would be £137million better than previously thought. It also raised its profit guidance by £40million to £835million. The company put the sales boom down to ‘the onset of warmer weather’ which drove demand for summer clothes following a wet and cold April.
It also pointed to annual pay rises – many of which come in April. ‘We do not think it is a coincidence that sales stepped forward so markedly at a time of year when many organisations make their annual pay awards,’ a spokesman for Next said.
However, the firm warned of a slowdown in its update: ‘If pay rises and the sudden change in weather have contributed to the over-performance, it is reasonable to expect the effect will diminish over time because ongoing inflation will slowly erode the effect of annual pay increases.’
