Welcome to the Reuters.com BETA. Read our Editor's note on how we're helping professionals make smart decisions.
Skip to main content


Next benefits from death of the high street

3 minute read

A branch of clothing retailer Next is seen in London, Britain, September 30, 2014. REUTERS/Andrew Winning

LONDON, July 21 (Reuters Breakingviews) - Next (NXT.L) is reaping the rewards of the collapse of its high street neighbours. The 11 billion pound retailer’s shares rose 10% on Wednesday after it raised its pre-tax profit forecast for 2021 by 30 million pounds to 750 million pounds. That was helped by a 19% rise in sales in the 11 weeks to July 17 versus the same period before the pandemic in 2019.

The shrinking high street is working out well for Next Chief Executive Simon Wolfson, whose business has proven more resilient than UK peers because over half its sales were online even before the pandemic. Department stores Debenhams and Topshop owner Arcadia collapsed and Gap (GPS.N) is shuttering its British shops. Next is valued at 15 times 2022 earnings, according to Refinitiv. That’s a discount to European peers, where the retail sector has been less affected by online sales. H&M (HMb.ST), for example, is currently valued on an 18 times multiple. The demise of his rivals will help Wolfson close the valuation gap. (By Aimee Donnellan)

On Twitter http://twitter.com/breakingviews

Capital Calls - More concise insights on global finance:

Gaming fail leaves Ubisoft stuck on takeover shelf read more

Bridgepoint IPO shows rare private equity largesse read more

HKEX hoists welcome typhoon signal read more

BBQGuys go easy on the hot sauce read more

Apollo may help Fortress glide to Morrisons’ till read more

Editing by Neil Unmack and Oliver Taslic

Reuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.

Sign up for a free trial of our full service at https://www.breakingviews.com/trial and follow us on Twitter @Breakingviews and at www.breakingviews.com. All opinions expressed are those of the authors.

More from Reuters