LONDON – UK apparel retailer, Next, claimed 2017 was the toughest year for a quarter of a century as it announced an 8 per cent fall in profits. Profits fell for the second year running, with pre-tax profits down to to £726.1m in the 12 months to January. Online demand held up but sales of full priced products tumbled, the company said, coming under continued pressure from discount retailers such as Primark.
Next has been one of the more solid and dependable performers on the UK high street over recent years, however, consecutive sets of poor annual trading figures offer an indication of just how tough mid-priced apparel retailers are finding the current trading climate.
In its annual financial report, Next accepted it has made some mistakes but also suggested the current clothing market is “weak,” an assertion which may come as a surprise to retailers such as Boohoo and Amazon which are both mopping up market share right now.
Full priced sales at Next shops fell by 7 per cent, while sales online rose by 11.2 per cent. Total revenues for 2018 fell by 0.5 per cent to £4.1bn.
Next’s chief executive, Lord Wolfson, said: “In many ways 2017 was the most challenging year we have faced for 25 years.” He added: “Whilst it has been an uncomfortable year it has also prompted us to take a fresh look at almost everything we do: from the structure of our store portfolio, the in-store experience and the generation of alternative retail revenue streams, the management of our cost base, our sourcing and buying methods, stock management and, most importantly, our online systems, marketing and fulfilment platform. As a result of these endeavours, many challenges and opportunities have emerged.”