Next sees profits slip and predicts high street will remain tough

Retail giant Next has posted a dip in annual profits and forecast a further decline over the year ahead as it said high street trading will remain “challenging”.

The clothing chain reported pre-tax profits falling 0.4% to £722.9m for the year to the end of January, with high street sales tumbling by 7.9%.

But total brand sales lifted 2.6% over the year thanks to a 14.7% jump in online trade and Next said while the high street will remain under pressure, web business will increasingly boost overall sales and profits.

The group said it expects profits to “marginally” decline by around 1.1% to £715m over the new financial year ahead, despite forecasting higher sales thanks to the better online outlook.

Chief executive Lord Simon Wolfson added that while Brexit worries still reign, the group can “see no evidence that this uncertainty is affecting consumer behaviour in our sector”.

“Our feeling is that there is a level of fatigue around the subject that leaves consumers numb to the daily swings in the political debate,” he added.