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Shaky Next forecast signals fragile high street

Next is expected to report a further decline in quarterly sales later this week, underlining the fragile state of the high street.

Analysts at Santander have predicted a 4.5% fall in Next brand sales for the third quarter, alongside a 7.6% drop in retail sales and flat performance in its Next Directory mail order business, according to The Sunday Times.

Warm weather at the beginning of autumn and tough comparables from the year before are behind the expected drop, they said. 

The retailer posted a 1.5% drop in pre-tax profits to £342.1m in the half year to July. Total Next brand sales were up 3% to £1.9bn, compared with the same period last year. However, full price sales were down 0.3%.

Chief executive Lord Simon Wolfson said Next may be forced to raise prices by up to 5% next year as a “worst case scenario” in order to combat currency related increases in costs in the wake of the Brexit vote in June.

Drapers has contacted Santander.

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