FASHION chain Next today warned that it faced increased sales pressure as struggling shoppers tighten their belts.

Mar 19 2008 by Henryk Zientek, Huddersfield Daily Examiner

The high street giant, which has stores at Kingsgate, and Great Northern Retail Park in Huddersfield, is braced for a dip in takings as consumers face soaring fuel bills and higher mortgage costs.

Next said its main customers – aged between 25 and 45 – were likely to be hit the heaviest by higher costs and debt burdens.

It predicted like-for-like sales would fall by 4% to 7% at its high street stores in the first half of this year – worsening from the 3.2% decline recorded for the 12 months to January.

Next said: “We can see no reason why there should be any recovery in consumer spending during the year ahead.”

Next finance director David Keens said: “Looking ahead, we still see a very difficult consumer environment.There is no getting away from that.”

The FTSE 100 Index-listed firm maintained “very conservative” sales expectations and will continue its clampdown on costs as it faces up to a challenging year.

Next expects like-for-like sales growth of up to 2% at its Directory catalogue and online business in the first half of this year.

The gloomy forecast for 2008 came despite a 4% rise in pre-tax profits to £498m for the year to January.

Next spent last year revamping its stores and ranges in a bid to “put the magic back” into the brand. It spent £122m on its stores in 2007, and by the end of this year almost three-quarters of its 502 outlets will be revitalised.