Next profits up £10m as summer sales pick up

Next profits climbed £10m in the six months to 27 July after sales rose by 2.3%. That’s about the only good news from a retailer we’ve heard all summer…

The company said it expected full-year profit before tax to be around 2.2% to 8.6% higher than last year – up from the -1% to 7% range it had originally expected. Admittedly, that’s a pretty wide margin of error it’s given itself. But at least the figures have risen, eh?

The retailer said the good news was down to the size of its sale. A study by PricewaterhouseCooper back in June found that at the beginning of the summer (when everyone was still stubbornly wrapping themselves up in winter woollies), three-quarters of the high street was on sale.

But Next said this summer’s sale was ‘much smaller’ than it has been in the past.

‘We went into sale with 20% stock than last year, clearance rates improved and markdown sales were only 13%,’ it added. Not bad, considering many retailers are still trying to clear their shelves of the early-season stuff they couldn’t sell, as shorts and strappy tops languish in boxes in their stockrooms, even as the temperature soars.

But the retailer warned that it had ‘continued to experience the weekly sales volatility which we saw in the first quarter’ – ie. customers still aren’t buying as much as Next would like. Although to be fair, customers will never buy as much as retailers would like…