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Next's store sales predicted to have slumped 12% as dismal year on the High Streets comes to an end


Analysts are wasting no time in making their gloomy predictions for Britain’s ailing high streets next year.

On Thursday, fashion behemoth Next will be the first to publish its sales figures for the crucial Christmas period and finance analysts at Jefferies have already forecast that the retailer will be forced to downgrade its full-year profit guidance.

The broker expects Next to report a 12.7 per cent drop in store sales in the run-up to Christmas, as mild winter weather and Brexit woes batter some of Britain’s best known brands 

Retail woes? On Thursday, fashion chain Next will publish its sales figures for the crucial Christmas period

Retail woes? On Thursday, fashion chain Next will publish its sales figures for the crucial Christmas period

Retail woes? On Thursday, fashion chain Next will publish its sales figures for the crucial Christmas period

While store sales are expected to disappoint, Next’s online sales could offset some of the decay and rise by an estimated 10 per cent over the festive period. 

James Grzinic, an analyst at Jefferies, said: ‘The combination of mild weather and Brexit-induced UK consumer weakness is bound to have impacted Next’s Christmas performance.’

Mr Grzinic expects Next to cut its full-year profit guidance by 3 per cent when its Brexit-backing chief executive Lord Simon Wolfson publishes the results.

Current guidance for annual pre-tax profit stands at £727million, but Jefferies is pencilling in a figure of £705million, down from last year’s figure of £726million.

In October, Next reported sales growth had slowed in the third quarter as both high street and online trading eased back.

The fashion and homewares chain recorded a 1.3 per cent rise in full-price sales for the three months to 27 October.

Shares in Next are up 0.27 per cent or 11.00p to 4,030.00p. 

HMV became the first high street casualty after Christmas and slumped into administration

HMV became the first high street casualty after Christmas and slumped into administration

HMV became the first high street casualty after Christmas and slumped into administration

With no let up for the retail sector on the horizon, music store chain HMV became the latest high street business to hit the buffers today.  Customers are now scrambling to spend their gift vouchers, which could become worthless if a buyer for the collapsed firm is not found. 

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The group, which has 130 stores and 2,200 staff, appointed administrators at KPMG following shocking Christmas trading.

It is the second time HMV has collapsed in six years. 

Mr Grzinic predicts more pain for retailers in 2019 as Brexit continues to take its toll. 

He said: ‘Looking at the early months of 2019, much of the outlook continues to be dictated by what shape the Brexit discourse will take.

‘Whether UK consumers take full advantage of their improved ability to spend (with disposable income growth currently at 3%) will depend on politicians steering the Brexit process through calmer waters.’  

Woes: Well-known high street names such as Poundworld, ToysRUs and Maplin have all gone bust this year

Woes: Well-known high street names such as Poundworld, ToysRUs and Maplin have all gone bust this year

Woes: Well-known high street names such as Poundworld, ToysRUs and Maplin have all gone bust this year

Well-known high street names such as Poundworld, ToysRUs and Maplin have all gone bust this year, while the likes of Marks & Spencer and Debenhams have announced plans to shut stores.

Several others, including Superdry, Carpetright and Card Factory, have issued profit warnings.

High street retailers have been battling the rise of online shopping, higher costs and plummeting consumer confidence as shoppers rein in spending, which some analysts attribute to uncertainty surrounding Brexit. 

Not all experts think Brexit is the driving force behind retailers’ woes, however. 

Troubles in the UK retail industry ‘will not go away, and could well intensify further’ in 2019, regardless of the unknowns of Brexit, a think tank of industry experts warned earlier this week.

Members of the KPMG/Ipsos Retail Think Tank said that, while it is ‘easy to point the finger at Brexit’ as the singular cause of all the woes in the industry, there is a wider array of forces at play.

These include changing shopping behaviour, too many shops, high levels of debt, compliance costs, macro-economic challenges, and a lack of talent.

However, one expert said that there may be a slight shift back in the favour of shops, as online spending’s 18 per cent share of the market in the UK is high and people value a ‘tangible experience’.

Next week will see a string of retailers publish their Christmas sales figures, including Morrisons, Sainsbury’s, Ted Baker, Tesco, Marks & Spencer, John Lewis, Debenhams and Dixons Carphone. 

Councils can apply for slice of £675m pot to help boost High Streets 

On 26 December, the Government published the ‘Future High Streets Fund: Call for proposals’ document.

Via this seemingly nondescript 17-page document, councils can apply for a slice of a £675million pot to bring ‘transformative change’ to their High Streets.

Noting the rise of online shopping, the document also said: ‘High streets that rely heavily on traditional retail without sufficient office space and housing surrounding the high street have found it harder to adapt to these changes and tend to be the ones that are struggling.’

Local authorities have until just before midnight on 22 March to apply and tell the Government their ambitions for their area and why they deserve the funding. 



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