Fashion retailers have reported a strong Christmas but remain cautious about the year ahead.

Next reports a strong Christmas

Retailers including Next and Ted Baker kept stock tight and avoided high levels of promotional activity in the run-up to Christmas to protect margins.

Total sales at Next jumped 3.9% from November 1 to December 24. Next said it focused on cost and stock control, meaning gross margins were “slightly better” than expected.

Ted Baker, one of the biggest Christmas winners so far, delivered soaring total sales growth of 20.9% in the eight weeks to January 5. The premium fashion brand avoided pre-Christmas discounting, which kept gross margins flat.

Young fashion retailer Blue Inc’s like-for-likes surged 12.1% in the four weeks to January 5, while total sales rocketed 21.7%. Its chief executive Steven Cohen said it benefited from its younger customer base, which remains more sheltered from the economic headwinds.

Despite its performance, Next warned trading conditions this year will continue to be difficult because of price inflation rising ahead of wage inflation.

The retailer said: “We expect the consumer environment to remain subdued but steady.”

Value retailer The Original Factory Shop revealed a 3.6% advance in like-for-likes in the six weeks to January 6 and said that gross profit was up 18% year on year as consumers continued to shop for value products.