Hall plan for Highcross is axed

brands on its website, including 43 added in the past six months, such as Tom Ford, Versace and Liz Earle.

More key brands will be added this year, including YSL, Bobbi Brown, Urban Decay, Giorgio Armani Beauty, Too Faced, Lancôme, Kiehl’s, Mugler and Viktor & Rolf.

Lord Wolfson said the beauty stores that were going ahead were all trials, with the risk and rewards being shared with the landlords.

The business will know if they are going to be a success in about six months.

He said plans were still moving ahead with a landmark Next Home store on the Fosse Park extension currently being built.

He also said the business had not taken lightly the decision to stop selling Boohoo products on its website after allegations of at least one Leicester factory making products for the brand exploiting its workers.

Boohoo, which sources 40 per cent of its clothing from UK factories, mostly in Leicester, has since undertaken an independent review of suppliers in the city, the results of which will be reported this month.

Lord Wolfson said Next’s Lipsy women’s clothes and accessories subsidiary was the only part of his business sourcing from Leicester.

He said it used two suppliers in the city making a “very small percentage” of their products, including one printing T-shirts.

He said: “When questions were raised over Leicester, we fully inspected both of those factories and will continue to be extremely vigilant with them.

“We were entirely satisfied they were compliant with all of our standards and rules.

“There is no question mark in our mind over those, but of course, given what’s happened in Leicester, we will continue to be more vigilant – both in Leicester and any other UK locations that we deal with.

“In terms of Boohoo, the Boohoo trade we did was through Lipsy. They were a client of Lipsy and it was, again, a tiny percentage of the group’s trade, significantly less than 0.2 per cent.”

Next trading figures, covering the six months to July, showed store takings down 61 per cent as a result of lockdown.

Online sales rose by 14 per cent as people shopped from home.

Combined, it meant overall sales were down a third.

The drop meant Next recorded pre-tax losses for the half year of £16.5 million, compared with profits of £327.4 million a year earlier.

Despite that, Next has upped its full-year sales forecast.

It now expects full-year underlying pre-tax profits of £300 million – up from the £195 million previously predicted – thanks to a rebound in sales in recent weeks.

Over the full year, Next said it now expects sales to be down 12 per cent, much better than the 30 per cent prediction given in April – at the time, its best-case scenario for the year.

The business has almost 500 stores and annual sales last year of £4.4 billion.

Signing off the half-year results to the end of July, Lord Wolfson said: “The company’s sales performance through the pandemic has been more resilient than we expected.

“The scale of our online business (in the UK and overseas), the breadth of our product offer and the fact much of our store portfolio is located out of town, have served to mitigate the worst effects of the pandemic on trade.

“Standing as we are in the midst of the pandemic, with no sign yet of abatement or vaccine, it might seem odd the essential tone of this report is optimistic.

“Particularly, some might coming from Next.

“But our confidence in the future is not because we see a comfortable route through to the end of the pandemic.

“The prospects for the next six months remain as uncertain as the outlook for the virus itself. Never has our guidance been more tentative or as broad in its possible outcomes.

“But in all our guidance scenarios the group generates a profit, generates cash and reduces its debts.

“So we can look to the end of this extraordinary time – whenever that may be – in the belief we can build on the strength of the Next brand, its people and its infrastructure, along with all the new opportunities those assets might deliver.” say,

In all our guidance scenarios the group generates a profit, generates cash and reduces its debts Lord Wolfson, right