Next bucks High Street gloom as shopping centre sinks

FASHION chain next soared to the top of the FTSe 100 following a boom in online sales as shares in shopping centre owner intu were hammered.

next, which is considered a high Street bellwether, now expects to post higher full-year profits and sales than expected following a boost from its online business, where sales rose 12pc.

Shares surged 8pc, or 448p, to 6064p, making it the biggest riser among Britain’s 100 largest listed firms. But shares in intu, which owns the Trafford Centre in Greater Manchester, the Metro Centre in Gateshead and Lakeside in essex, plunged 31.9pc, or 22.41p, to a record low as it racked up further losses and a fall in rental income.

at 47.9p, the shares are down 87pc since 2015, valuing the firm at just £678m. Rival hammerson was also hit, falling 10.7pc, or 25.7p, to 214.3p.

analysts called intu’s results ‘awful’ and warned of further trouble ahead.

Simon Wolfson, chief executive of next, admitted trading on the high Street continued to be challenging and that competitors have been slashing prices heavily as a result.

But next’s strong online performance helped offset a 4.2pc fall at its stores during the 13 weeks to July 27, pushing total sales up 4pc.

next now expects to rake in profits of £725m this year, £10m more than previously predicted and slightly higher than its £722.9m earnings last year.

Wolfson said: ‘Our [summer] sale didn’t do very well and we think that was because promotional activity into late June and July was higher on the high Street than it had been in previous years.’

intu’s losses widened to £856.4m during the first six months of the year compared with a loss of £506.5m a year ago. The company blamed rising retail failures for a 7.7pc drop in rental income.

The value of its shopping centres and retail parks fell nearly 10pc in the first six months to £8.4bn.

a string of intu’s key tenants such as Topshop, house of Fraser and Debenhams have embarked on store closures in recent months.

Traditional retailers are suffering as more customers go online.

Matthew Roberts, who took over as chief executive at intu in april, admitted that ‘radical transformation’ was needed as he announced a five-year strategy to overhaul the shopping centre operator.

The group has scrapped its dividend to pay off its £4.7bn debt pile and is also planning to sell off more assets in the UK and Spain.

Roberts said: ‘The first half of 2019 has been challenging for intu.

‘With the pace of change accelerating in our sector, radical transformation is required, and we have tested our beliefs to develop a clear five-year strategy to reshape.’