Company weathers storm on the high street but expects tough year ahead
Next has reported an 18 per cent increase in pre-tax profits for the year to January, largely in line with analyst expectations, but the company warned it expects the coming year to continue to be 'challenging'.

The fashion retailer reported a 13 per cent rise in group turnover to£2.85 billion and a pre-tax profit of£423 million, compared with£250.1 million last year.

Over the past seven weeks, Next's retail sales, excluding Directory - which had a 10.4 per cent sales rise over the same period - were up 8.2 per cent. However, like-for-like sales at the retailer's 279 stores that have been operating for more than a year were down 0.9 per cent.

'While there are parts of our ranges that we believe could be better, we think the poor performance during the past seven weeks is indicative of an underlying easing of consumer demand,' said chief executive Simon Wolfson. 'As we indicated in September, we anticipated a more challenging consumer environment in the current year and do not foresee any significant economic improvement for at least six months.'

However, the company will continue to invest in new stores, having added 483,000 sq ft (44,870 sq m) of primarily out-of-town retail park space last year. In the coming financial year, Next plans to open at least 800,000 sq ft (74,320 sq m) of space, significantly more than in the past two years.

Evolution analyst Nick Bubb said: 'We were cautious about Next ahead of the results today, but in fact it has not been hit quite as hard as we expected by the very poor high street trading in recent weeks and seems to have perfected the trick of being able to keep opening profitable space in retail parks.'