However, the retailer, which this morning posted a 4 per cent rise in full-year profits, insisted that that improvements made to the business would stand it in good stead.
Next chief executive Simon Wolfson said: “Against a downbeat economic outlook, we are more positive about the health of the underlying Next business. We believe our ranges have made good progress and that the Next brand is in much better shape than at the same time last year.”
Wolfson has budgeted for the core retail business to experience a like-for-like sales decline of between 4 and 7 per cent in the half year and for Directory sales growth of between 0 and 2 per cent.
The chief executive also revealed that Next is to ramp up international expansion by developing a wholly owned store chain in Scandinavia and central Europe. Next will buy its central European franchise partner’s business – 12 shops in the Czech Republic, Hungary and Slovakia – and will open two Nordic stores this year. It already has one in Denmark.
Next chairman John Barton said that the overseas ventures would, if successful, “bring new sources of growth over the longer term”.
Wolfson added that Next’s priorities this year would be to “maintain very conservative sales expectations”, control stocks, seek more cost savings and continue to invest in the brand “through improving the design and quality of our ranges, marketing and shopfit”.
Next reported preliminary profit before tax up 4.1 per cent to£498 million on sales ahead 1.4 per cent to£3.33 billion.
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