Next PLC recently announced that its operating performance will remain weak, mainly because of the soft trading environment in U.K. clothing and footwear, exacerbated by cost inflation from pound sterling depreciation and rising labor costs. We believe that Next's intention to maintain special dividends over the next 12 months hampers its financial flexibility, although the amounts will be adjusted to the prevailing trading conditions quarterly. We acknowledge that Next's credit metrics will continue to benefit from the higher-margin revenues of the Next Directory segment, including international sales, as well as its ability to convert a high proportion of EBITDA into operating cash flow. Accordingly, we are revising the outlook on Next to negative from stable and affirming our 'BBB' long-
