HIGH STREET FASHION HOUSES IN DILEMMA AFTER NEXT SHARE PRICE DROPS

Retail player Next's biggest fall on FTSE 100 as much as 14 percent revealing worst-than-expected performance over Christmas

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Next Store In UK London

Next share price drops to as-much-as 14% as it warned profits for the year until January 2017 to decrease by around 3.6 per cent. Not only were Christmas sale worse than expected, but the company is expecting to face a tough time as a result of rise in inflation and change in customer buying habits.

Next Fashion Retailer
Photo: London Stock Exchange

The group has been among the most successful fashion retailers across UK during the last decade, and despite of the working under-pressure for better performance the current results makes the retailers go weak. The fall in the price have not just affected the Next group but is also expected to face by other fashion retailers including, Debenhams, Marks & Spencers and the associated British Foods.

Its chief executive, Simon Wolfson – a prominent Vote Leave campaigner, said consumers were buying less clothes and instead spending their money on leisure activities: “Clothing has had a good run. It had a soft landing during the credit crunch when things like car sales were hit harder but now there is a shift away from clothing to more experiential based spending like eating out, holidays and visitor attractions.” {The Guardian}

The chain expects a price rise for up-to 5% yet warns 2017 profits to fall as much as 14%.

Next Fashion Store

On the other hand, the online fashion retailers like ASOS and Boohoo, are seeing their online fashion sales growing than any other fashion street brand. This gives a solid criterion that the shoppers are going online at a high rate.

The fashion analyst noticed the situation to arise because of the consumers switching channel and showing more response towards online shopping. This is happening in UK at a brisk rate than anywhere else in the world. The analysis shows that around £1 in every £6 spent on clothing is spent online rather than on high street.

However, if NEXT is going through the tough time as this, you can bet most of its emulators will be as well.

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