Many UK retailers are in dire trouble, but Next is beating expectations.
It’s been a tough time for the British high street recently. Higher import prices are pushing up costs, while economic uncertainty could potentially hit demand. And that’s before worrying about the real elephant in the room: the shift from bricks and mortar to online trading. Even five years ago retailers could kid themselves that the ability to browse clothes in person was something that no internet retailer could provide.
Sadly for them, all that meant was that people browsed the goods in person in their stores, only to buy them online. Indeed, the ubiquity of smartphones means you don’t even need to wait until you get home to place your order.
Unable to adapt to the new environment, several retail dinosaurs have recently perished or are in trouble. BHS went bust spectacularly last year, while Carpetright, New Look and House of Fraser have been forced to enter into voluntary agreements, which have seen them close scores of shops up and down the country, shedding thousands of jobs. Debenhams is also struggling after recent disappointing trading figures.
An encouraging update
Still, even in a troubled sector it is possible to find companies that are thriving. Several weeks ago clothing chain Next surprised analysts when its latest figures showed that it had largely managed to sidestep the collapse in sales that the extremely harsh winter brought for retailers.
The firm’s sales for the first quarter of this year were up by 6% on the same period a year ago. An unusual weak spell at the start of 2017 made that comparison a bit more flattering than it really is – but sales were still 2.1% higher than the much stronger first