Next fashions a profit warning

Store sales dive but Ted Baker bucks trend

HIGH street chain Next is set to hit shoppers with a second price hike as profits plunged.

The fashion and homewares giant yesterday said prices would rise at least 4% on its autumn and winter ranges, on top of a 4% increase earlier this year.

The blow for customers was blamed on the weak pound pushing up import costs.

It came as Next yesterday revealed its first annual fall in profits for eight years –down 3.8% to £790million.

A 9.6% rise in profits at its online and catalogue arm, Next Directory, couldn’t mask a near 16% slump in earning from stores, where sales fell 2.9%.

Next said it was hit by a triple whammy of “economic, cyclical and internal factors”.

The last of those included not ordering enough bestselling wardrobe staples.

Next chief executive, Tory peer Lord Wolfson, admitted the firm took its eye off the ball as it focused on fast fashion – getting the latest trends into stores quickly.

Shoppers were warned they may face fewer core lines until the autumn as it ironed out the problem.

The chain also said Brits were spending less on clothes in favour of eating out and going to the cinema.

However, that didn’t harm rival Ted Baker, which announced bumper results yesterday.

While Ted Baker is much smaller than Next, its sales still jumped 16.4% to £531m last year, with profits up 4.4% to £61.3m.

Founder and boss Ray Kelvin said: “We have continued to trade well and develop, despite a backdrop of ongoing external challenges across our global markets. This success reflects the strength and appeal of the brand as well as the outstanding quality of our collections.”

Next’s Lord Wolfson warned that the firm was “extremely cautious about the year ahead”.

It forecast annual profits could fall by anything from 1.3% to £780m, or as much as 13.9%, to £680m.