Retail giant Next is staying tight-lipped over its planned massive new store for Sunderland after warning it is facing uncertainty over the future.
Shares in the chain fell 10% after it revealed it had a difficult Christmas and warned annual profits to January 2017 were set to fall by about 3.6% and could plunge by as much as 14% in the next financial year.
It will take time for them and we have to be patient, but there will be uncertainty in the meantime.Lord Wolfson
The group said it was facing “exceptional levels of uncertainty” amid a consumer spending squeeze, soaring costs from the weak pound and “little visibility of the approach the UK Government will be taking to Brexit”.
Next’s plan for a 45,000 sq ft, two-storey store on the former Crowtree Leisure Centre site was approved by planning bosses last year.
An extension to The Bridges has been on the cards since council chiefs announced plans to demolish the aging Crowtree Leisure Centre in February 2013.
Next said it was unable to comment on whether the latest announcement might have any impact on the scheme as it was still finalising contracts.
Chief executive Lord Simon Wolfson – a prominent Leave campaigner – said that while the Government was right not to be rushed into a Brexit plan, fears over the negotiations would heap further pressure on an embattled retail sector.
“It will take time for them and we have to be patient, but there will be uncertainty in the meantime,” he said.
The group had been hoping for a fourth-quarter turnaround after a difficult 2016.
But it said the end-of-year blow meant profits were expected to come in at £792million for the 12 months to January 2017, depending on January trade, compared with previous guidance of £785million to £825million.
Lord Wolfson said 2017 was going to be “even tougher”, with the group forecasting that its next year’s profits could tumble to between £680million and £780million.
He said there was no immediate end in sight to the shift in spending away from clothing and footwear.