Next's profits down after 'challenging' year
Fashion and homewares retailer Next has posted a decline in full year profit after experiencing what it described as the most challenging period in twenty-five years.
In the 52 weeks to January 2018, total revenue edged down 0.5% to £4.1 billion while pre-tax profit fell by 8.1% to £726.1 million.
Full price sales in Next’s stores were down 7% although its online business saw full price sales growth of 11.2%
Next chief executive Lord Wolfson said a difficult clothing market had coincided with self-inflicted product ranging errors and omissions.
He added: “At the same time, the business has had to manage the costs, systems requirements and opportunities of an accelerating structural shift in spending from retail stores to online. In the end our profits were in line with the forecast we issued in January 2017 and the company goes into the coming year in good financial health.”
Next said the year’s results has prompted it to undertake of review of almost everything it does including the structure of its store portfolio, the in-store experience and the generation of alternative retail revenue streams, as well as its cost base, sourcing and buying methods, stock management and online systems.
The company’s net trading space increased by 51,000 square feet in the year, taking its portfolio to eight million square feet. Next also closed 17 stores although three were as a result of consolidating two stores into one location.
Looking ahead, Next chairman Michael Roney said; “Even though the wider economy, clothing market and High Street look set to remain challenging, at our central guidance for the year ahead, earnings per share will modestly move forward. Our core strategy remains unchanged, focused on our products, our profitability and returning surplus cash to our shareholders.”
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