'˜The high street is not dead' insists retailer after Christmas rise

Fashion chain Next has posted a surprise rise in sales over Christmas and upgraded its profit forecast as the retailer's chief executive insisted the high street still has a future.

Wednesday, 3rd January 2018, 1:39 pm
Updated Wednesday, 3rd January 2018, 1:41 pm
Next chief executive Lord Simon Wolfson Picture: Next/PA Wire

Next, which has stores at Cascades in Portsmouth, Fareham and Havant, said full-price sales in the 54 days to December 24 increased 1.5 per cent, ahead of expectations, with part of the improvement down to much colder weather leading up to Christmas.

The group saw online sales jump 13.6 per cent in the period, helping mitigate a 6.1 per cent decline in high street sales.

As a result, Next has increased its full-year profit guidance by £8m to £725m, although the figure is still a long way off last year’s £790.2m.

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Next chief executive Lord Simon Wolfson said that declining in-store sales are not a death knell for the high street.

He said: ‘Retail will remain challenging and the shift from retail to online will continue, but half of our online orders are delivered to a store, so this is not the end of the high street as some people have said.’

However, he added that Next will look to reduce costs by renegotiating rents with landlords and controlling wages and man hours.

The more upbeat trading update will come as a relief to the retailer, which like its peers has been hammered by rising costs linked to the Brexit-battered pound and the resultant collapse in consumer confidence.

But the retailer warned that challenges remain.

‘Many of the challenges we faced last year look set to continue into the year ahead.

‘Subdued consumer demand driven by a decline in real income, the increase in experiential spending at the expense of clothing, and inflation in our cost prices remain challenges for 2018,’ Next said.