Next, one of Britain’s biggest clothing retailers, on Wednesday said that 2016 sales could fall by 2.5 per cent, an improvement on a previous forecast, warning that it expected a longer term trend of weaker clothing demand to persist.

Next said that full-price sales would this year be in the range of 2.5 per cent lower to 2.5 per cent higher, narrowing a previous range of anything from 3.5 per cent lower to 3.5 per cent higher.

The company said that it was too early to tell what the impact of Britain's vote to leave the European Union in June was having on consumer demand in the country, and blamed what it called extremely volatile trading on an underlying weakness in demand for clothing which dates back to last October.

Continued uncertainty

“Our wider than normal range reflects the continued uncertainty and volatility of consumer demand,” Next said in a statement.

Next warned that the devaluation of the pound since the vote would mean that input costs would rise by about 5 per cent on like-for-like products from 2017/18.

Next said its currency exposure was fully hedged up until January 2017. For the second quarter period, Next reported a 0.3 per cent rise in full-price sales, but warned that the current quarter would be worse given a tougher comparison.

Next said that it expected annual group pretax profit to be in the range of £775 million to £845 million, narrowing a previous forecast for it to come in between £748 million and £852 million. – Reuters