Next “remains resilient” despite 97% drop in half-year profits

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Next trading update covid-19
Store sales were down 61% to £344.6 million
// Next sales drop in first half of the year by 33%
// Pre-tax profits tumble 97% to just £9m
// Due to recent recovery in demand, Next raised full-year outlook

Next has seen its pre-tax profits drop by a colossal 97 per cent during the first half to just £9 million, but has increased its full-year profit guidance as demand recovered.

The fashion retailer fell to a half-year loss of £16.5 million but has raised its full-year outlook from £195 million expected in July to £300 million.

In the six months to July 25, the retailer’s full price sales dropped by 33 per cent, but in the last seven weeks they rose by four per cent – thanks to cooler weather and less travelling.


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Meanwhile, Next’s online sales dropped by 14 per cent to £862.6 million in the period, while store sales were down 61 per cent to £344.6 million.

“The sales performance through the pandemic has been more resilient than we expected,” Next chief executive Lord Wolfson said.

“The scale of our online business, in the UK and overseas, the breadth of our product offer, and the fact that much of our store portfolio is located out of town, have served to mitigate the worst effects of the pandemic on trade.”

During the period, Next said it continued to develop new business areas, such as launching its Total Platform service, covering everything from website systems to distribution for other businesses.

The first site was launched for Childsplay Clothing.

Separately, Next signed a joint venture deal for Victoria’s Secret’s UK business this week after months of speculation, saving over 500 jobs at the lingerie retailer.

Next will own 51 per cent of Victoria’s Secret, and the partnership means Next will operate all of the firm’s stores in the UK and Ireland, subject to agreeing to terms with landlords.

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