Fashion retailer Next has recorded a decline in half-year profits against a “challenging and volatile” retail backdrop.
Pre-tax profits declined 1.5% to £342mn in the six months to July, while full-price sales were down 0.3%.
The news comes six months after Next said it was preparing for its toughest year since the recession.
Chief executive Lord Wolfson of Aspley Guise said: “As expected, it has been a challenging year so far, with economic and cyclical factors working against us, and it looks set to remain that way until mid-October at the earliest.”
“There has been some talk of a general retail bounce in July and whilst Next did enjoy very strong sales in July, this was driven by a much larger end-of-season sale,” he added.
“Trading since July, which to some extent may have been affected by the Sale, has remained challenging and volatile. We are maintaining our full year sales guidance but expect to have a clearer picture of trading conditions at the beginning of November when we announce our third quarter sales.”
Next, which is opening 27 new shops while closing 28 unprofitable sites, said increasing its store space was “one of the few ways” to mitigate losses in like-for-like sales.
Accordingly, the retailer plans to increase trading space by 350,000ft2 this year, taking the portfolio to 8 million ft2.
Stores that were planned to open early in 2017/18 will now be opened at the end of the current financial year.