Today’s first-half results from John Lewis and Next highlighted the extent to which businesses have been hit by the drop in the value of sterling and downturn in consumer spending. However, there may be light at the end of the tunnel.
While sales at in the first six months of the year, the retailer said its fortunes are improving as price inflation looks likely to settle and improvements to its products, which have been filtering into its autumn ranges, have begun to pay off. fell by 2.2% and pre-tax profit by 9.5%
As a result of this, Next has upped its sales and profit guidance for the year.
Meanwhile, profits at , which comprises John Lewis and Waitrose, were hit by inflationary pressures driven by the weakened sterling and political uncertainty. Partnership
However, total sales at John Lewis department were up 2.3% for the six months to 29 July, and fashion sales rose 3.5%. There was a standout performance from womenswear sales, up 5.8%.
Of course, Brexit remains an unknown and tough trading conditions are set to continue. Both sets of financial results from this morning point to a slowdown in consumer confidence and spending, which is what fashion retailers have been dreading.
John Lewis Partnership chairman Sir Charlie Mayfield said poorer consumer confidence will continue to impact the business in the second half of the year, and has called for a “serious parliamentary debate” on “the kind of Brexit” the UK is going to have.
Yet, while neither Next nor John Lewis is out of the woods, there were welcome notes of positivity in both set of financial results. Both Next and John Lewis have said they are seeing the benefits of significant investment into their product offerings.
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