Prices up as profits rise at Next
Leicester-based fashion retailer Next has said it expects to increase prices by up to 8 per cent after a rise in cotton prices. However, the company, which released its interim management statement to the Stock Exchange this morning, said it expects to make a profit between £535m and £560m for the year to January 2011.
Next said that sales for the third quarter (to 30 October 2010) were up 2.2 per cent. The company attributed the sales rise to “a strong performance from our online business, Next Directory and the continued addition of profitable new retail space”.
The online sales “more than made up” for like-for-like sales in Next Retail, which the company said was “just below the midpoint of our guidance”.
Retail sales fell by 0.3 per cent in the three month period, while online sales rose by 7.9 per cent.
As cotton prices reach an all-time high, Next said that retail price rises were likely to be at the top end of its previously stated 5 per cent to 8 per cent range for the first quarter of next year.
The company said: “The longevity of what appears to be a speculative bubble in cotton prices will be critical in determining prices for the second quarter.”
