Next Share Price Plummets
Fashion retailer Next has blamed a sudden plummet in share prices on ‘warm weather’, which they believed caused decreased sales of their stock over the last quarter. The latest official data, released by the company in September, suggests that Next’s sales fell significantly in the second quarter, adding their name to an already lengthy list of high street retailers struggling to compete with their online counterparts.
The retailer was the biggest faller on the FTSE 100 in the week fo the announcement, most likely triggered by the figures officially released from the company in a conference call, which painted a rather bleak picture of the future of the retailer.
Weather, Not Brexit
CEO Simon Wolfson, a Conservative peer and Leave supporter, suggested that the weather was more to blame for shrinking sales than the ever-looming political nightmare of Brexit, which has caused many businesses to contract due to increasing economic uncertainty.
He stated that the warmer weather meant they were unlikely to sell pieces designed for the winter – though critics have questioned that an increase in temperature would not have caused a drop as significant as the one seen this week.
Representatives from Next have explicitly stated that they saw no evidence of Brexit uncertainty in their overall sales, despite damning figures that show other high street retailers including John Lewis have been hit hard on higher-value products like home furniture and electrical goods.
Brexit has remained a topic highly associated with Next; the company claimed that if the UK left the EU without a deal on October 31st, they would be able to cut their overall clothing prices by 2% thanks to the doing away of import taxes.
This would allow the company to pass on significant savings to customers, though this has yet to be proved or even confirmed by the powers that be.
Meanwhile, other retailers – particularly in the food and drink sector – have warned that prices could increase if the UK left without a deal and it would be the customer who would bear the brunt of the costs.
Next’s shares were down 5% overall with an overall pre-tax profit in 2018 of £320m.