Next sees profits rise but is cautious about the outlook
Fashion retailer Next saw total profit after tax for the year to 31 January increase to £474.8 million from £400.9 million in the previous year.
Directory sales rose 16% to £1.1 billion, and now account for nearly a third of the company's business. This increase in online sales offset a 1.4% decline at Next's retail division. Total group revenue increased 4.3% to £3.44 billion.
However, Next said in a statement that the outlook for the year ahead was "very uncertain" and predicted more retail sales declines this year.
The company said it had "performed remarkably well" last year saying in a statement: "2011 presented the retail sector with the perfect economic storm. Consumer demand was anaemic, held back by a combination of high inflation, low growth in wages and limited growth in consumer credit."
"Our own input costs rose as soaring cotton prices and overseas wage inflation were passed on by our manufacturers."
The company plans to open 15 more stores than it closes in the coming year. It is also developing 19 new concept sites featuring separate fashion and home stores sitting side by side and is planning to sell a range of DIY goods.
Next raised prices by an average of 7% last year as it was forced to pass on rising cotton and commodity prices.
Simon Wolfson, Next chief executive, said he believed there was a bright future for Next’s high street stores as they worked in tandem with the Directory business. He added: "We remain convinced that there is a continued place for fashion retail stores and that increasingly customers will see stores and online as part of a single service."
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