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 their high-street operation for the first time. It came as the fashion and homeware giants yesterday released a trading statement that revealed varied fortunes for the group. Shop sales tumbled 9.2 per cent between October 28 and December 29 but their Directory arm enjoyed a 15.2 per cent jump. Wolfson said he looked at store numbers “all the time” but securing better deals with landlords had prevented closures. The average renewed store lease spans just five years, with rents cut more than 25 per cent, he said. Next now expect 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 £715million.

It’s forecasting a further 8.5 per cent fall in shop sales, with online up 11 per cent, 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 are the first big retailers to release their festive trading figures.

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

“The company are better managed than their peers with tight, consistent leadership,” he said. “While it might be thought unexciting and a little bland, Next are risk averse and reliable.

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

NEXT’S PREDICTED ANNUAL PROFIT