But since the beginning of last year, the stock has motored ahead, on the back of strong results and a highly regarded management team. Next, the clothing retailer, almost went bust in 1989 but it has been a great high street success story in recent years. There was a blip in 1998, when it got a range of women’s clothing very wrong, which halved the share price. But since the beginning of last year, the stock has motored ahead, on the back of strong results and a highly regarded management team.
Next reported yesterday interim pre-tax profit up 15 per cent to £93.0m. There was no hint of any slowdown in the numbers, with current trading also doing well, at 19 per cent better than last year.The company has pitched itself at the upper end of the mass market and has carved an enviable niche on the high street. While other clothing sellers have spectacularly foundered, such as Marks & Spencer and C&A, Next has managed to produce one well-selling range after another.As well as running the related Next Directory home shopping business, the company is moving increasingly to other product areas, especially home furnishings.

To pull this off, it must move to large stores and that is what it has started to do. Thirty-seven per cent of its space is now in stores measuring 10,000 sq ft or more.Next is now in every town it wants to be in, with 333 shops across the country. It will simply now be a question of juggling the particular space it occupies in each of these locations, by moving outlets within towns to bigger shops.This raises the question of whether Next is becoming a mature business. Simon Wolfson, chief executive, freely admits that the 8 per cent like-for-like sales growth reported yesterday is not sustainable He thinks 3 to 5 per cent is more likely longer term. Many analysts doubt whether even this is achievable.Clothing must be the ultimate fickle market place – you are only as good as your present range Summer 2001 was kind.

The coming season may not be.Credit Lyonnais, the broker, forecasts 2001 full-year profits of £243m or 52.2p a share The stock is already off its highs, seen earlier this year. It closed yesterday at 860p, down 37p, leaving it on a chunky forward multiple of 16.Bargain hunters would be well advised to look elsewhere.Morgan CrucibleThe downturn in the US technology and automotive sectors has taken a heavy toll on Morgan Crucible. The company, which provides carbon and ceramic-based components, to clients in automotive and disk-drive manufacturing, said plunging demand made for a “challenging” first-half.Pre-tax profit slid 9 per cent to £37.6m, while group turnover, boosted slightly by acquisitions, gained 2.7 per cent to £540m. The interim dividend was left unchanged at 7.4p.Ian Norris, chief executive, has launched a campaign to reduce working capital allocations and wring more cash out of the business. Getting inventories down is expected to help boost second-half cash flow. But given continuing tough trading conditions, investors should be prepared for an eventual dividend cut. Dividend cover fell to 1.5 from 1.6 in the first half, making Morgan’s aim to raise the ratio to 2.0 look difficult.That would put in some doubt the company’s ability to match last year’s total dividend payout of 15.9p – the figure that most City analysts, rather bravely, have forecast.