Yesterday we reported that John Lewis had enjoyed a remarkable festive trading period. Another high street store celebrating a profitable Christmas is the fashion retailer Next which has revealed a significant rise of 3.9 per cent in total sales from the 1st of November to the 24th December 2012 when compared to the same period in 2011.
Profits for the year were originally forecast to between £590 million and £620 million yet, due to the huge success of the Christmas season as well as a tight rein on budgets across the year, industry experts now believe that the profits will be at the top end of this range or will exceed top expectations completely.
As a result, Next has announced that its annual pre-tax profit forecast has risen to between £611 million and £625 million.
Much of this success can be attributed to the fact that remaining stock for the annual end of season sale fell by 8.2 per cent when compared to last year. This means that the chain managed to both save money on initial orders, negating the possibility of taking a loss on excess, and also sell greater volumes of items at full price rather than gaining less of a profit when prices were lowered.
In its latest trading statement, the chain stated its belief that little will change in the retail environment in 2013 as consumers will still be wary of excessive spending, yet a plunge in sales is also unlikely due to more stability in the field of employment.
It said; “We think it is unlikely there will be any dramatic change in the consumer environment in the year ahead. Healthy employment numbers mean that there is little risk of a significant downturn.
“However, the continued growth in price inflation ahead of wage inflation means that real wages will continue to fall, albeit at a slower rate than last year.
“On balance, we expect the consumer environment to remain subdued but steady.”
The full year results to January 2013 are expected to be confirmed in a statement by the company on the 21st March.
Next’s successful Christmas season has been praised by industry experts, especially after shares in the company rose by 4 per cent following their trading announcement.
Conlumio retail analyst Joseph Robinson said; “Next’s performance underlines the trend of this festive season – namely that online has been the principle driver of growth and is dividends for those retailers that have invested in their online offer.
“In our view, Next is a very well-run business with a tight grip on costs, discounting and stock management.”
Next has over 500 retail outlets in the UK and also trades in around 50 countries worldwide.
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