Next swimwear and online sales make a splash amid retail gloom

THE recent warm weather and a surge in sales through its website helped fashion retailer Next grow while many of its high street neighbours foundered in the first half of the year.

Full-price sales, which exclude discounted stock, grew 4.5pc in the 26 weeks to July 28. This was despite a 5.3pc slump in sales through its 528 stores because digital sales leapt 15.5pc. Overall sales growth slowed in the second quarter but still expanded faster than expected, up 2.8pc.

Lord Wolfson, Next’s chief executive, said the “highest summer products”, such as shorts, T-shirts and swimwear, all performed better than expected. But he cautioned that shoppers had avoided the high street when temperatures rose above 86F (30C). “Overall it has been good for us but on the days when it has been really hot, it hasn’t been,” he added.

“Equally, people aren’t ordering online either, they are in the garden rather than sitting inside on their Wi-fi.”

Investors sent shares down 7.1pc to £55.12 yesterday, as Next held back from upgrading full-year profit expectations despite the boost from the warm weather. The company said sales that would otherwise have been made in August were pulled forward. It said efforts to minimise excess stock had also been beneficial, leaving it with 20pc fewer items to shift when its July sale came around.

Overall, Next still expects full-year profits to come in 1.3pc lower at £717m alongside 2.2pc growth in fullprice sales. The update comes at a torrid time for high streets. Figures compiled by The Daily Telegraph show that more than 1,000 shops have been earmarked for closure, putting around 20,000 jobs at risk, as retailers struggle with higher costs and the rise of online shopping.

Lord Wolfson said the distress on the high street had enabled Next to secure rent cuts of about 25pc on leases that have come up for renewal. Business rates have also hit high street retailers and restaurants. Lord Wolfson said Next was not pushing for an overall tax cut, but wanted the system to better reflect the areas that are struggling across the country.

“What we have at the moment is that rates are set on a valuation which is two years out of date when they come into force,” he said. “The trouble with that is the value of shops in different high streets is changing dramatically.”