Next success will be online Finance and web overtake shops

MORE than half of Next’s sales are now from online. Boss Lord Wolfson said the firm’s internet and finance arms combined had overtaken its high-street operation for the first time. It came as the fashion and homeware giant yesterday released a trading statement that revealed varied fortunes for the group.

Shop sales tumbled 9.2% between October 28 and December 29, but its Directory arm enjoyed a 15.2% jump. Wolfson said he looked at store numbers “all the time” but securing better deals with landlords had prevented branch closures.

The average renewed store lease spans just five years, with rents cut more than 25%, he said. Next now expects to make an annual profit of £723million, slightly less than previously predicted, with earnings per share up. That cheered investors with Next’s share price rising sharply yesterday, despite the firm predicting profits in the year ahead will drop to £715m.

It’s forecasting a further 8.5% drop in shop sales, with online up 11%, although Wolfson warned much will depend on the outcome of Brexit.

He added: “People are maybe a little more cautious given the uncertainties around Brexit, but I think that’s as strong as you can put it.”

Next is the first big retailer to release its festive trading figures.

Independent retail analyst Richard Hyman warned against reading too much into Next’s results for the wider shops sector.

“The company is better managed than its peers with tight, consistent leadership,” he said.

“While it might be thought unexciting and a little bland, Next is risk averse and reliable.

“Over the years the store’s characteristics have helped to set the company apart.”