Retailer Subsequent trims forecasts and warns on sterling weak spot

Subsequent has pared again its full-year forecasts and warned that the weak spot of sterling will inflate promoting costs additional subsequent yr.

The UK style retailer now expects full-year pre-tax revenue of £840mn towards an earlier estimate of £860mn. That may nonetheless be a small improve on final yr. Full-price gross sales within the second half of the yr are forecast to fall 1.5 per cent towards earlier expectations of a 1 per cent rise.

The London-listed group, whose chief government Lord Simon Wolfson is a Conservative peer, mentioned “it appears inevitable that clothes and homeware progress will gradual if not reverse” regardless of excessive ranges of employment and financial savings.

“It’s too early to inform what impression authorities help may have, although it appears probably that the dimensions of the measures introduced lately will serve to help spending in a roundabout way,” Subsequent mentioned in an announcement on Thursday.

“Trying into subsequent yr it now appears to be like as if the weak spot of the pound, if it continues, will serve to inflate promoting costs, notably within the second half of the yr,” it added.

Subsequent had already indicated that clothes costs would rise by about 6 per cent this autumn due to larger manufacturing facility gate and freight prices.

Within the six months to end-July, full-price gross sales had been up 12.4 per cent towards a comparative interval the place retailers had been shut for a sustained interval, whereas pre-tax revenue was 16 per cent larger at £401mn.

The pound has shed a couple of fifth of its worth towards the greenback this yr, whereas shares in Subsequent have declined a couple of third over the identical interval.