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13 September 2012 10:13
High street fashion chain Next has said that first-half profits leapt 10%, leaving it on course to meet full-year expectations. However, it added that August and September had been "unusually quiet".
The fashion and homewares chain, which has around 540 stores, reported pre-tax profits of £251 million in the six months to July as new stores and strong online sales offset lower sales from shops open more than a year.
Retail sales were slightly ahead of plan in the half-year, Next said, with sales excluding VAT up 0.2% on last year and new space adding 3.7%. The Next Directory website saw a 13.3% increase – 8% in the UK – with its new "Offers Tab", the online equivalent of a clearance store selling the previous season's stock, adding 2.4% to UK sales.
Chief executive Lord Simon Wolfson said the retail sector and wider economy was subdued and would not see a return to boom for "some time to come".
He added that, as expected, overall impact of the Olympics was negative, as potential consumers stayed at home to watch the event rather than shop.
Opening new space is part of Next's strategy, alongside growing its website Next Directory, but progress has been slower than expected in the current year. Lord Wolfson warned the biggest barrier to growth was the lengthy planning permission process, which has prevented the company from opening new space earlier.
