Next PLC warned that the increasing shift toward online sales would likely cause a slight decline in earnings over the next year and pose a long-term challenge to the profitability of retail operations. Moreover, online sales in the U.K. rely on consumer credit offered by Next's highly leveraged captive credit division and therefore expose Next to credit market risk. We are affirming our 'BBB' long- and 'A-2' short-term credit ratings on Next and its debt. The negative outlook reflects a possibility that we could downgrade Next over the next 12-24 months if the group fails to sustain its profitability, the quality of its credit portfolio, or its adjusted credit metrics, including funds from operations (FFO) to debt of more than
