Next leads the retail charge
FASHION chain Next takes centre stage on Thursday when it kicks off a round of announcements from retailers detailing how well they fared over the crucial Christmas period.
The group, headed by chief executive Simon Wolfson, is expected to show that it has done better than many of its rivals.
But Next is said to have struggled to show strong sales growth compared with the final months of 2003, when the chain had an exceptional season.
Shares in Next, which has 371 stores, rose more than 40% last year as the company enjoyed strong trading and grew market share, helped by the slump in the fortunes of rival Marks & Spencer.
At its interim results in September, the company reported a 30% jump in first-half profits, though it did caution that the second half would be tougher.
Next will be followed by the biggest names on the High Street in the next few
weeks with Dixons, House of Fraser, Sainsbury, Woolworths, Boots and WH Smith all scheduled to release trading updates.
One of the most keenly awaited is Marks & Spencer, which last year rebuffed a 400p-a-share approach from entrepreneur Philip Green and reports its sales figures next week.
Trading statements are watched closely because a large proportion of annual retail sales are packed into the festive season, providing an important barometer of a retailer's performance.
Just before Christmas, the Financial Services Authority warned retailers that if they suffered badly over Christmas, they must tell the stock market as soon as possible rather than wait for scheduledtrading updates. But one chief executive of a major clothing retailer, who asked not to be named, has branded the announcements 'a waste of time'.
Another senior retail figure said reporting sales figures was ' meaningless'. The fashion retailer said: 'The figures show nothing and are impossible to compare because everyone does them differently.'
Retailers have differing internal definitions of like-for-like sales - a measure of comparing sales figures with the same period a year earlier - making comparisons difficult. Some include new stores, report figures net of inflation or make alterations according to promotional activity.
All this adds up to confusing and sometimes meaningless figures, said Kevin Hawkins, director-general of the British Retail Consortium. 'The figures are just not meaningful. They just show a percentage-increase or decrease in sales, but tell you nothing about the margins and level of profitability,' he said. 'They really aren't very helpful.
'No one is obliged by law to give an update but the trouble is that if one retailer took the initiative and simply stopped publishing one, everyone would think they were in huge trouble. If I had my way, I'd stop everyone from doing them.'
