Next reports fall in profits
Fashion and homewares retailer Next has reported that its full year underlying pre-tax profit has fallen by 3.8% to £790.2 million.
In the year to January 2017, total group sales edged down 0.3% to £4.1 billion.
Total sales for Next’s high street stores declined by 2.9% with profits down 15.8% although Next Directory grew its sales by 4.2% as more customers shopped online. In addition, the Directory benefited from improved stock availability, enhanced website functionality and overseas growth.
Next chairman John Barton said: “As anticipated, the year to January 2017 was a challenging year for Next."
He added: “Trading conditions in the year ahead will continue to be tough, however I believe that by focusing on our core strengths, as we did during 2008, we will see Next emerge from this period stronger than before.”
Net trading space increased by 330,000 square feet in the year, taking the portfolio to eight million square feet. Store numbers remained broadly the same, with the increase in new space being offset by the closure of smaller, less profitable stores.
In the months ahead, Next plans to focus on improving the company's product, marketing, services, stores and cost control.
Next said it is remaining "extremely cautious" about the coming year with Lord Wolfson, Next chief executive, adding: “The clothing sector faces three potential threats: a sectorial shift away from spending on clothing, price inflation as a result of Sterling's devaluation and potentially weaker growth in real incomes in the wider economy.
“These headwinds are likely to be felt most acutely in our retail business, as sales continue to migrate away from the High Street to online shopping.”
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