Next Concerns Hit Retailers as Warm UK Weather Deters Purchases of Winter Clothing
The FTSE has edged lower today, retailers dipping in reaction to Next's announcement that the unusually warm weather had caused it to lower its full-year profit forecast.
Conversely, Britain's top share index reacted little to the data demonstrating that the UK's economy is bigger than industry experts had previously predicted.
Next, the country's second largest retailer of clothing, fell by 4.3% after revealing that the unusually warm weather being enjoyed by Brits across the country was deterring shoppers from purchasing winter clothing.
To date, the company's third-quarter sales are up by 6%, which is less than its original predictions of 10%.
In addition, trading volume in Next stood at twice its 90-day daily average against just a quarter seen on the FTSE 100 in general.
Jawaid Afsar, Securequity Sales Trader, told Reuters: 'Next does not often lower guidance. So the fact that they have said they may do so due to the warmer weather is hitting the shares, which have had a strong run, and will also hit the sector if the weather remains unseasonal.'
The retailer's weather warning also had an impact on other retailers, with Marks & Spencer
dropping by 2%, making it the second biggest decliner in the FTSE.
In addition, midcap Debenhams fell by 2.9% in the benchmark share index.
By 9:59am BST on Tuesday, the FTSE 100 was down by 4.81 points, equating to 0.1%, to 6,641.79.
Last week, the index dropped 2.8% and is down by 1.5% for the year so far.
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By Jonathan Sudaria, 30 September 2014