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LONDON, United Kingdom — Next Plc sees no letup in the brutal conditions that have forced enfeebled British retailers to the wall this year.
The company expects retail margins in the fiscal year to fall to 10 percent from around 13 percent, mainly as a result of lower like-for-like sales, the UK’s second-largest clothing retailer said Friday in a statement.
A slowdown in consumer spending resulted in weak sales updates from home-improvement company Kingfisher Plc, fashion retailer Ted Baker Plc and suit seller Moss Bros Group Plc this week. Amid a surge in sourcing and labor costs, as well as the relentless rise of Amazon.com Inc., Toys “R” Us Inc.’s UK arm and electronics retailer Maplin both collapsed in February. Already-tough retail conditions have been worsened by ill-timed bouts of snow from a series of recent storms dubbed the “beasts from the east.”
“Even though the wider economy, clothing market and High Street look set to remain challenging, at our central guidance for the year ahead, earnings per share will modestly move forward,” chief executive Simon Wolfson said in the statement.
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The company now expects full-price sales growth of 1 percent in 2019.
By Sam Chambers; Editors: Eric Pfanner, John J. Edwards III, John Lauerman.
