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Tesco clothing to top £1bn

Tesco's clothing sales are on track to break the £1 billion barrier next year, after analysts predicted it would report double-digit growth in clothing in its full-year results next week.

Teather & Greenwood analyst Rhys Williams said Tesco's clothing sales should reach £850 million for the year to February, growing at between 15% and 20%.

"Tesco is on target to turn clothing into a £1 billion business and will look to develop its internet and catalogue streams," he said.

Williams added that growth of the online and catalogue businesses would become more important in areas where Tesco had failed to expand its shopfloor capacity for non-food.

Numis analyst Steve Davies said the group would continue to extend existing stores to include a clothing offer. "A lot of Tesco's growth has been driven by non-food, and store expansion is a good economic way to grow the clothing business," he said. "Tesco will also be keen to trump the fact it has held on to (UK clothing chief executive) Terry Green."

Seymour Pierce analyst Richard Ratner said Tesco would open non-food stores if it could not get planning permission to expand existing sites. He said: "You can't interfere with the food offer, so Tesco will find other ways to get its clothing across. Its figures will be very good, with young fashion doing well after it invested heavily in fast fashion."

He said Tesco, which he predicted would post total pre-tax profits of almost £2.5bn for the year, would grow its market share and could reach the £1bn clothing target next year.

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