High Street Steadfast Next saw better-than-expected sales in the summer with a strong trade in children’s clothing and household products, although formal wear and parties declined due to the pandemic.
According to Bosses, total sales increased 1.4 percent in the three months ended October 24 – or 2.8 percent if that includes consumer credit interest.
The company now expects an annual pre-tax profit of £ 365 million – £ 65 million more than originally – with an estimate that net debt will fall by £ 487 million to £ 625 million.
In a statement to the London Stock Exchange, Next said: “Sales results by product category remained very similar to the second quarter, with household and children’s clothing outperforming while demand for formal wear for men and women remained weak.
“Online sales remain strong both in the UK and abroad. In retail, suburban shopping parks continue to outperform major roads and malls.” “
The number of products sold at a discount – for sale – fell 12.3% year over year, although Next stated that this was due to fewer customers in stores and a focus on full-price warehousing.
Sales were particularly strong in the last two weeks of August as the government encouraged workers to return to their offices before Rule 6 was implemented.
They fell sharply in September, but accelerated again in October and outpaced sales a year earlier.
Online sales remained strong, increasing 23.1% in the three months to October 24, although in-store sales remained weak – a 17.9% drop over the period.
The boss outlined three scenarios for the main Christmas trading period and said sales could fall by 8% because of their “central scenario” which includes additional deadlock. Customers avoid busy businesses on Christmas Eve and increase self-isolation.
The “up” scenario predicts a period of flat sales compared to a year earlier, where “heavier deals are no additional hindrance for retailers” and no additional dead ends.
The “downside” will be a two week blockade which will reduce sales by 20%.
Then he added: “The biggest unknown is whether England, Scotland and Northern Ireland will follow Wales’ decision to close insignificant retail stores.
“A two-week blockade in England, Scotland and Northern Ireland in November will reduce full retail sales (weather permitting) by around £ 57 million.”
“We haven’t found any evidence of transmission of the virus in our stores, nor are we aware of any studies showing that household clothing and clothing pose a significant risk of infection.”