Upbeat High Street

Fashion retailer Next (NXT) revealed a rosier-than-expected picture of life on the struggling High Street after revising up its first-half sales and profit guidance.

The UK's second largest clothing retailer by sales value saw like-for-like store sales for the 14 weeks to 2 May dip 2.3% - better than the drop of between 6% and 9% it had forecast.

Chief executive Simon Wolfson said that the spending slump on the High Street has "potentially bottomed out" with falling sales not proving as volatile as in 2008. "I wouldn't want to characterise that by saying that we think the whole economy or High Street has recovered, it's just not as bad as we thought it was going to be," he said.

However, the group, which has 510 stores nationwide, urged caution. "We expect the second quarter will be weaker than the first as comparative figures are more challenging." It added that the improvement in sales could also be offset by the swine flu pandemic although its affect on consumer behaviour is as yet unclear.

In March, the group revealed profits of £428.8 million although analysts expect these to dip to £360 million in the current year.

Gary Ellison of Fortis Private Banking says: "Overall, Next remains a very high quality play on a challenged High Street. It has long been one of our preferred plays if exposure to retail was required and has been an outstanding performer, more than doubling from its lows set in July last year.