Next posted its first fall in full-year profits in eight years as boss Lord Wolfson warned that the retailer was set for “another tough year”.
The industry bellwether recorded a 3.8% slump in underlying pre-tax profit to £790.2m.
Wolfson attributed this dip to shoppers choosing to spend on experiences over retail purchases, as well as teething problems in the fashion giant’s clothing division, where a push for newness meant the retailer lost sales of staple products.
Despite plans to innovate its website and delivery proposition, Next’s boss was far from optimistic about the year ahead, and sad that there would be “a combination of economic, cyclical and internal factors working against us.”
However, the fashion retailer stressed that it was “financially strong” and had “a highly profitable, well maintained and relatively flexible store portfolio” which would hold it in good stead to weather the storm ahead.
Whilst Next grappled with changing consumer habits, Ted Baker continued its run of soaring sales and profits.
The quirky fashion retailer posted rising sales across its UK and international division bolstered by strong online growth, with aggressive bricks-and-mortar expansion slated for the coming year.
By contrast, beleaguered fashion retailer Blue Inc’s CVA was ‘unanimously’ approved by creditors today.
And retail sales grew ahead of expectations in February but recorded their worst three-month slump in seven years, according to figures from the Office for National Statistics.
Quote of the day
“There is a lot of migration to the UK that is extremely productive and it would be an enormous mistake to cut off a group of people who make a huge contribution to our economy at a time when we have record low unemployment.”
– Lord Wolfson on hopes that the Government will take ‘an open approach to Brexit’.
Today in numbers
The rise in Ted Baker’s full-year pre-tax profit to £61.3m
The cost savings Next has identified in the year ahead to offset rising costs associated with the national living wage, business rates and the apprenticeship levy.
No formal updates are scheduled for tomorrow so keep an eye out for our take on the biggest stories over the last seven days in the latest instalment of The Retail Week.
Grace Bowden, reporter