Next catalogue sales exceed expectations

British clothing giant Next reported on Wednesday that first half pre-tax profits had risen 3.6 percent to £178.9 million on revenues up 8 percent to £1.51 billion, in line with the top end of expectations. The clothing catalogue Next Directory exceeded expectations, with operating margin gaining 16.6 percent. “The internet has become a significant part of Next Directory’s business and we now take 45 percent of its sales online,” said the group. Sales at Next Directory rose 15.3 percent, while profits were up 44.7 percent. The business now represents over a third of total sales, but generates more than half the profit made in retail stores. The group expects Next Directory sales to gain between 7 and 9 percent in the second half.

Strong demand for the online business compensated for a less stellar performance on the high street, with no indication of a significant recovery in the coming months. Like-for-like sales dropped 7.5 percent for the first half, as had been expected, and although recent sales have improved, the company advised against reading too much into such a short period. “Sales remain volatile and have been positively affected by the cooler weather,” the company said. It blamed poor like-for-like sales on weak full price comparable sales in the first half, which were intensified by a poor first week of its sale. “The sale was at the same time as last year, which in the current retail environment may have been too late, and initial markdowns may not have been aggressive enough,” the company said, adding that it would review the timing of the Summer Sale next year as well as the level of markdowns. It has also reduced the amount of in store products for Autumn/Winter 2006/7 by more than 10 percent to improve store layout and presentation.

The retailer has had to deal with increased competition from the likes of Marks and Spencer and Primark and lower consumer spending levels due to higher living costs. On a more positive note, the group’s new brand Lime, which was introduced in clearance stores earlier in the year, has “started better than originally anticipated”. “We will be opening several trial stand-alone stores in the second half to gauge whether Lime could operate as an independent brand.” As the locations are existing Next shops that are due to be vacated as part of the group’s expansion programme. A spokeswoman said that the first Lime stores will be opened this week in Derby and Newbury. Later in the month a shop will open in Doncaster . If the venture proves successful, new locations might follow, she said.

Click Here: creed perfume sale