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Retailer Next is having trouble attracting shoppers. It’s not having much luck with investors either.
Shares in the high street stalwart are down by 5 per cent so far today, making this the worst performer in the otherwise mildly upbeat FTSE 100, after it trimmed the upper end of its target ranges for sales and profits and noted a “challenging” environment.
Analysts at RBS said:
We think Next has been finding it challenging managing the balance between having faster decision making in the business and enough commercial, wearable product. It may also be being impacted by tougher price competition in the mid market.
We would expect this statement to weigh on the UK general retail sector short term. In the sector we would prefer to own either ABF Primark for the structural longer-term growth of Primark with double-digit EPS growth, Marks & Spencer for its more food-dominant self-help story and a big markdown recovery opportunity in clothing or Dixons Carphone.