Two big brokers have issued bearish notes on Next, fuelled by concerns ranging from the impact of price rises to management continuity and strategy.

ING initiated coverage last week with a sell note, just days after Credit Suisse cut its forecasts.

Discretionary demand for mid-market clothing and gross margin pressure were among factors that unsettled ING analyst Peter Brockwell.

He warned: “Next is heavily exposed to the UK where the economic outlook remains weak, while it is positioned in the mass mid-market where overcapacity remains an issue.

Next is heavily exposed to the UK where the economic outlook remains weak

“Next’s strategy to increase prices later this year by 3 to 5 per cent could prove a mistake if M&S continues to be aggressive on its pricing in a bid to capture
market share.”

Credit Suisse analyst Tony Shiret cut his forecasts for this year and next by 10 per cent and 5 per cent respectively.

He said: “Management is clearly strong across a range of areas. So its longer term intentions are of interest and we would be happier if we felt it was going to stay for the longer term. Also we feel that a UK-centric strategy based now on moderate expansion into new markets where success has to be determined is not enough.

“If we felt the chief executive was engaged fully with the business we would have expected a longer term strategy to be more fully expressed than it currently is.”