Next sales down 4.4%

High street retailer Next said sales for the fourteen week period to 1 November 2008, down 4.4% were in line with guidance given at the time of its interim results in September. The combined total sales for Next Retail and Next Directory for the period were up 0.9%. Next Retail sales were up 0.3% on last year. Like for like sales in the 334 stores that were unaffected by new openings were down 4.4%. Tighter control of Spring Summer stock resulted in fewer markdown sales in August, so full price sales performance was marginally better than total sales.

In its interim trading statement Next said there is no change to its September guidance on full year gross margins, costs or operating margins for Retail and Directory. Cash flow remains as expected and, subject to the important run up to Christmas, year end net debt will be in the region of £670m. This includes the £17m cost of acquiring the Lipsy clothing business at the end of September as previously announced. The company is still budgeting for Autumn Winter 2008 Retail like for like sales to be in the range -4% to -7% and Directory sales to be in the range 0% to +2%

The outlook for consumer demand in 2009 is mixed. On the up-side, lower interest rates and falling fuel and food bills are likely to increase the amount available for discretionary spending at some point during the year. On the down-side, rising unemployment will reduce earnings and falling house prices may encourage people to save more. On balance the company expects negative like for likes to continue throughout next year, though not necessarily at any worse rate than the current year.

Next is due to issue a sales update for the period to 24 December 2008 on Tuesday 6 January 2009.