High street fashion chain Next has warned that 2017 will be "challenging" after reporting a downturn in sales over the festive period.
Full-price sales year-on-year were down 0.4 per cent in November and the first 24 days of December, said the retailer, while annual profits for 2016 are now expected to be £792m, the lower end of previous forecasts of between £785m and £825m.
The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
The company said: "The year ahead looks set to be another challenging year; therefore we are preparing the company for tougher times."
It added: "The fact that sales continued to decline in quarter four, beyond the anniversary of the start of the slowdown in November 2015, means that we expect the cyclical slow-down in spending on clothing and footwear to continue into next year."
It also warned prices could rise by up to five per cent because of the fall in the value of the pound following the Brexit vote, something which would "depress sales revenues by around 0.5 per cent".
Sales for the next 12 months are expected to lie between a fall of 4.5 per cent and a rise of 1.5 per cent, while profits are predicted to fall to between £680m and £780m.
There is "one bright spot" for the retailer, says Retail Week: sales from its Next Directory catalogue increased by 5.1 per cent.
Retail Week adds that the company has "historically outperformed the High Street", but says its performance has "faltered in recent quarters".
Next, however, said it was "well-placed to weather a downturn in consumer demand".
It added: "Our balance sheet remains robust and our net debt is forecast to close the current year at around £850m, this is more than covered by the value of our Directory debtor book, which will be approximately £1bn at the end of January 2017."
-
September 14 editorial cartoonsCartoons Sunday’s political cartoons include RFK Jr on the hook, the destruction of discourse, and more
-
Air strikes in the Caribbean: Trump’s murky narco-warTalking Point Drug cartels ‘don’t follow Marquess of Queensberry Rules’, but US military air strikes on speedboats rely on strained interpretation of ‘invasion’
-
Crossword: September 14, 2025The Week's daily crossword puzzle
-
Can the UK avoid the Trump tariff bombshell?Today's Big Question President says UK is 'way out of line' but it may still escape worst of US trade levies
-
Five years on, can Labour's reset fix Brexit?Today's Big Question Keir Starmer's revised deal could end up a 'messy' compromise that 'fails to satisfy anyone'
-
Why au pairs might become a thing of the pastUnder The Radar Brexit and wage ruling are threatening the 'mutually beneficial arrangement'
-
Brexit: where we are four years onThe Explainer Questions around immigration, trade and Northern Ireland remain as 'divisive as ever'
-
Is it time for Britons to accept they are poorer?Today's Big Question Remark from Bank of England’s Huw Pill condemned as ‘tin-eared’
-
Is Brexit to blame for the current financial crisis?Talking Point Some economists say leaving the EU is behind Britain’s worsening finances but others question the data
-
Labour shortages: the ‘most urgent problem’ facing the UK economy right nowSpeed Read Britain is currently in the grip of an ‘employment crisis’
-
Will the energy war hurt Europe more than Russia?Speed Read European Commission proposes a total ban on Russian oil
