Next target £50: Leicestershire-based fashion chain breaks £40 share mark
Shares in Next have broken the landmark £40 mark for the first time as the fashion chain continues to defy the gloom hanging over the high street.
It follows buoyant Christmas trading from the Enderby-based group, which is on course for a fourth consecutive year of record profits.
Next's share price exceeded £40 during trading on both Thursday and Friday, but had fallen to £39.68 by the end of Friday. Analysts said a rise to £50 during 2013 was quite possible. This would see the overall value of the business soar to £7.5 billion from a value of £6.3 billion at Friday's closing share price.
Chris Hailes, division director at stockbroker Brewin Dolphin's Leicester office, said: "They are a successful business, if they continue to be successful their shares will go better. You keep thinking they've gone up too high, but they keep getting higher."
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Mr Hailes said Next had become a darling of the stock market because of a strong history of innovation and cash control. "They are just very well organised and well managed and are always full of new approaches and ideas," he said.
The 31-year-old retailer's online operation has been the main driver of sales growth in recent years and now makes up about a third of the group's £3.5 billion annual turnover. "They are ahead of the competition when it comes to online," said Mr Hailes.
Professor Jim Saker, retail lecturer at Loughborough University, said: "It just shows what you can do if you get it right. Purely and simply, they've got the supply chain right and they've got the product right."
Next revealed this month it would make a pre-tax profit of between £611 million and £625 million in the year to January 31. This compares to a surplus of £579 million in the previous 12-month period, the group's third consecutive year of record profits. The group, which employs 3,500 people in Leicestershire and has more than 520 UK stores, reported robust sales in the run-up to Christmas, mainly thanks to healthy online trading.