Sun taking the shine off sales; WEATHER WOE SEES SHARES LOSE PS600M; CITY DESK.
Byline: Edited by GRAHAM HISCOTT
CLOTHING chains could be forced to slash prices after counting the cost of the Indian summer.
Analysts say big-name firms may have to unleash hefty discounts after one of the warmest Septembers on record left them lumbered with unwanted coats and jumpers.
More than PS600million was wiped off the stock market value of some of Britain's clothing heavyweights yesterday. The shares sell-off was triggered by Next revealing a sultry September has hit sales.
Third-quarter takings to date are up 6%, but far lower than the 10% forecast.
Next is banking on temperatures plunging soon, but added: "If this unusually warm weather continues for the duration of October then we are likely to lower our full-year profit range of PS775million to PS815m." Next's shares fell nearly 3.8% yesterday as a result.
But it wasn't alone in having its fingers burned by the warm start to autumn.
John Lewis, French Connection and H&M have all blamed the recent mild weather for slow clothing sales.
Shares in Marks & Spencer sank 2.6%, adding to wider concerns about Britain's biggest clothing retailer.
According to industry expert Kantar Worldpanel, M&S suffered a 0.6% drop in its share of the clothing market in the 12 weeks to the end of August. Menswear saw a 1.2% drop.
Shares in Debenhams, which has struggled too, also fell.
Some clothing chains, including Gap, have already cut prices or have run special promotions.
Retail analyst Freddie George, of Cantor Fitzgerald, said: "I think there will be more aggressive discounting if this weather continues for the next two weeks."
Maureen Hinton, global research director at Conlumino, said: "September and October are usually when we go out and buy those big ticket items like coats and knitwear which gives retailers a lift at this time of year.
"For consumers, there is probably going to be a lot more discounting in the run-up to Christmas."
"It's the time when we buy big ticket items like coats"