Next group suffers first profits fall for eight years
HIGH STREET giant Next has revealed its first fall in annual profits for eight years as it was hit by sliding sales and warned that 2017 is set to be “another tough year”.
The retailer posted a 3.8 per cent fall in underlying pre-tax profits to £790.2m for the year to January – the first fall in profits since 2008/09 at the height of the financial crisis.
Next confirmed it had hiked prices by 4 per cent on average for the first half of the year and warned prices would remain under pressure in the second half from rising buying costs caused by the Brexit-hit pound.
Chief executive Lord Wolfson said: “The year ahead looks set to be another tough year for Next.
“We will continue to focus on improving the company’s product, marketing, services, stores and cost control.”
Next saw overall sales fall 0.3
The year ahead looks set to be another tough year for Next. Lord Wolfson, chief executive of Next
per cent over the year, dragged lower by a 4.6 per cent slump in full-price shop sales. Total retail sales dropped 2.9 per cent to £2.3bn.
It was “extremely cautious about the outlook for the year ahead”, with sales in its first quarter likely to be around the “bottom end” of forecasts for a drop of up to 3.5 per cent.
The group reiterated warnings made in January that full-year profits could fall by as much as 14 per cent as it is braced for the impact of its price rises and an ongoing shift in spending away from clothing as well as pressure on wages from Brexit-fuelled inflation.
Lord Wolfson admitted last year’s sales woes were partly down to its product range, with its lines missing the wardrobe staples Next is renowned for, such as easy-to-wear work blouses in a number of colours.
He said: “In focusing so much energy on changing our buying culture, processes and adopting exciting new trends, we have omitted some of our best-selling, product from our ranges.”