FASHION retailer Next saw its strongest sales growth “for many years” in the first trading half and brushed off talk that Britain’s high streets are in long-term decline.
Group chief executive Lord Wolfson said the latest performance was partly due to a continuing strong expansion of floorspace, and the chain was negotiating to expand at least 25 more stores around the country.
“There is much talk of the decline of the UK high street, but our experience is far from one of uniform decline,” Wolfson said.
“Towns and cities that actively invest in better road access, plentiful and affordable parking, and where planners are open to ambitious and imaginative development have every change to expand and thrive.”
Unveiling a 10.3 per cent jump in sales to £1.8 billion, Wolfson said Next had benefited from introducing new fashion ranges at shorter notice. But he said the business, Britain’s second-biggest clothing retailer, had also been helped by external factors such as the improving economy, interest rates of just 0.5 per cent, the increasing availability of credit from banks, and better summer weather this year.
Pre-tax profits lifted 19 per cent to £324.2 million. Next, which has more than 500 stores in Britain and about 200 overseas, said profit from its core bricks and mortar retail division jumped 22.6 per cent to £152.3m, as it expanded its selling space.
Wolfson said that, in future, more than two-thirds of new floorspace would be from new large format stores, also selling homeware as well as fashion, which the company first trialled on the English south coast at Shoreham in 2011.
Next Directory, the retailer’s home shopping catalogue and internet division, saw profits grow 10.2 per cent to £172m.
The group overtook Marks & Spencer with a £695m annual profits haul earlier this year, and reiterated its guidance that it expected to lift this to between £775m and £815m in the year to January 2015, on sales growth of 7 to 10 per cent.
Analysts expect M&S – which, like Next, traces its roots back to Leeds – to make a profit of £663m in the current year.
James McGregor, director of consultant Retail Remedy, said: “Next’s success comes down to the simplicity with which it approaches fashion retail. It knows its target customers inside out and remains acutely focused on delivering what they want.”
In October, the company introduced a free next-day delivery to stores service, which now covers 94 per cent of its nationwide outlets.
Wolfson said Next had also “taken greater fashion risk by adopting new trends earlier and in greater depth, through placing larger orders on key new items”.
He added: “We can also do more to respond to the important new trends which emerge only a short time before the season starts.
“This will require the development of new practices and better relationships with quick response suppliers, so that we can delay purchasing decisions without risking late deliveries of compromised quality.”
Next’s shares closed down 215p, or 3 per cent, at 6,950p.