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Fashion retailer Next has recorded a 2.7% rise in profits for the 26 weeks to July 2019, aided by a 12.6% increase in online sales.
Pre-tax profits for the first half of the year were £319.6m compared with £311.1m for the same period last year. Total brand sales also increased by 3.8% to £2.05bn, earnings Per Share (EPS) were up by 7.5% on last year to 199.5p.
Total sales from Next’s store estate fell by 5.5% year-on-year to £874.3 million, and operating profit in the same division dropped by 23.5% £56m. Comparatively total sales online rose by 12.6% £1bn, with £177m profit, a rise of 8.4%.
On the release of the results, CEO Simon Wolfson, “insisted” prices will be cut by around 2% in the event of a no-deal Brexit.
Next warned that autumn trading so far had been “disappointing”, which was likely to lead to a weaker third quarter, but it has been attributed to warm weather rather than uncertainty over Brexit.
He told the PA news agency that these cuts would probably be seen in shops from January onwards, although he said he would rather a deal was secured before the 31 October Brexit deadline.
Wolfson said: “Britain is in a much better place today than it was in the run-up to the March deadline. The weight of rent, rates and service charge costs remain stubbornly fixed in the stores where the leases have yet to be renegotiated.”
Wolfson, who supported the Leave in 2016, also said last month that he believes a no-deal Brexit will only lead to “mild disruption”.
The results come after the brand adjusted its profit forecasts in July, after a “better than anticipated” Q2.
Angus Burrell, head of omni-channel solutions at Valitor, added: “Next has shown the way forward for other retailers. Its recent partnership with Amazon and the introduction of its new service, Amazon Counter, proves that Next is adapting to the challenges facing the retail sector, and still keeping customers first.
“With recent research suggesting that click and collect orders will make up over 10% of all online orders by 2023, it’s positive that Next is taking steps now to prepare for this. However, even Next can’t rest on its laurels, as 60% of us won’t go back to a retailer after just one bad experience. Next is highlighting that the high street is still alive and well, but only if you have a good customer experience.”
