‘We have weathered the storm ... so far’

Bullish Next chief bucks High St gloom

NexT is ‘ weathering the retail storm’ as it enjoyed a rise in half-year profits, the store’s boss revealed.

Lord Wolfson, 51, said his business was adapting well to the online world.

The Brexiteer shrugged aside the issue of political uncertainty, saying customers’ buying habits were affected more by the weather.

his comments came as a struggling high Street saw retail sales fall 0.2pc in August after a healthy summer, the Office for National Statistics reported.

Online sales also tumbled 3.2pc, the biggest fall since May 2015.

An ONS spokesman said: ‘ Shoppers spent less on both food and clothing while department stores resumed their downward trend after a brief rally in July.’

But Next – which this week launched a collection by TV presenter emma Willis ( pictured far

right) – said profits in the six months to July were 2.7pc higher than in same period last year at £320m.

Wolfson ( pictured right) said: ‘So far, we have weathered the retail storm. We have adapted what we do and have a business model that – for the moment – works in an online world.

‘Our sales and earnings per share are ahead of where they were five years ago, our business delivers healthy net margins and we remain highly cash generative. But although we can see a way through the wood, we are not out the other side yet.

‘ Consumer markets remain extremely volatile, the online world changes rapidly, and the uncomfortable transition away from high retail rents is by no means complete.’

he said a No Deal Brexit would reduce prices on fashion and home furnishing. Next’s import- duty costs would fall by £25m under the Government’s temporary tariffs, and it would pass the saving on to customers. Discounts would be seen in shops from January onwards if the UK left on October 31 without a deal – although Wolfson stressed he would rather one was secured.

Sales in Next’s 499 shops had fallen 5.5pc, while online and finance revenue had increased 12.6pc and 9.9pc respectively.

The decision to host nonNext brands online has generated an estimated £80m profit this financial year.

Shares dipped 5.7pc, or 350p, to 5820p due to reports of ‘ disappointing’ autumn trading. Wolfson put this down to warmer weather, claiming sales would rebound when temperatures turn. ‘If you get a warm week in September, people won’t rush out to buy winter clothing,’ he said.

russ Mould, investment director at broker AJ Bell, said Next was coping ‘quite well with the structural challenges facing the retail sector’.