business news | Next: pent-up demand for summer outfits drives sales boost for fashion retailer | Economic news

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Suppressed shoppers’ demand for summer outfits has helped fashion retailer Next exceed sales targets and raise profit forecasts.

An increase in consumer spending in the UK and the accumulation of savings during closings were also seen as key success factors.

The group’s shares surged higher as it announced an 18.6% increase in full-price sales for the 11 weeks through July 17 from 2019 levels.

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Next previously said it expected sales growth of 3%.

The company also said it has decided to repay part of the trade tariff relief it received during the pandemic – worth £ 29million.

Meanwhile, he plans to distribute £ 240million in excess cash to shareholders via a special dividend later this year.

Next attributed the sales performance to factors such as “pent-up demand for adult clothing, with many customers making fewer summer purchases in the past 18 months.”

He also pointed to “the onset of extremely hot weather in late May and early June” and said growth had slowed considerably after this period had passed.

Meanwhile, Next said, fewer vacations taken abroad “likely increased UK domestic spending” as consumers savings had “increased significantly over the past year”.

A store worker cleans the exterior of a Next retail store on Oxford Street following the introduction of measures to bring England out of lockdown. 06/11/2020
Store sales were still below pre-pandemic levels

He warned that he did not expect sales for the remainder of the year to reach “unusually high levels.”

The group has raised its annual profit forecast from £ 30million to £ 750million.

Next hit the sales pace despite a 6% delay in in-store sales compared to 2019, with e-commerce up 44%.

Shares were ahead 7% by midday.

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