Next toughs it out

Next drove group turnover up 8 per cent in the six months to July 30, with profits before tax up 6.1 per cent to£172.6 million. However, like-for-like sales slipped 2.9 per cent as the tough trading climate took its toll.

Sales in Next stores were 7 per cent ahead of last year. In the first half, Next increased the number of stores by 27 to a total of 411. The majority of new space came from opening stores in out-of-town retail parks.

Net operating margin was down from 12.1 per cent to 11.7 per cent.

Next Directory sales were 12.1 per cent ahead of last year. The increase in underlying demand - the goods requested by customers - was 9.6 per cent and lower returns rates resulted in a higher sales increase. The average number of active customers throughout the season was 14 per cent ahead of last year.

Describing the results as 'solid', chief executive Simon Wolfson said: 'Our core strategy for growth remains unchanged - we continue to focus on improving our product ranges, opening profitable new space, expanding our Next Directory customer base and using surplus cash to buy back shares. Inevitably, the economic climate has placed a greater emphasis on cost control and here we have made some progress.'

Next said£1.5 million of its stock is caught up in the recent EU embargo of Chinese textiles. It expects to be able to import most of this, but said it will have to re-source product from other manufacturing bases.