Next has emerged as a winner from a tough Christmas trading period for Britain’s retailers after the cold snap in November stoked demand for winter coats and knitwear.
The high street company reported full-price sales growth of 5.2% for the last two months of 2019, which was well ahead of its own forecasts. The better than expected outcome meant Next nudged up its profit guidance for the year by £2m to £727m.
Under its longstanding chief executive, Simon Wolfson, Next has been one of the industry’s most resilient retailers with the strength of its home shopping arm – which sells other fashion brands as well as its own – helping to offset falling sales in its high street chain. The same was true this Christmas, with sales in its stores falling 3.9%, while online sales jumped 15.3%.
Next is the first major retailer to reveal its performance over the all-important Christmas trading period. The run-up to the holiday was characterised by heavy discounting by rivals – which Next traditionally does not participate in – starting with the Black Friday extravaganza at the end of November. The weekly updates provided by the department store chain John Lewis point to a huge spike in trade around Black Friday followed by several disappointing weeks in December.
Wolfson said full-price sales at Next had exceeded internal budgets by £9m, adding: “We believe our sales performance in the period was helped by a much colder November than last year and improved stock availability in both our retail stores and online.”
The retailer said that while less stock had gone into its end-of-season sale, clearance rates had been slower than expected.
Richard Lim, the chief executive of the consultancy firm Retail Economics, said Next was reaping the benefit from years of investment in its web operation that had come into its own as shopping habits changed.
“This was an impressive end to the year as their outstanding online business continues to set them apart from the competition,” he said. “There’s no doubt that more Christmas shopping was done online this year than ever before. Consumers expect to be able to seamlessly shop across a multitude of physical and digital channels, often at the same time, and the retailer has embraced this new reality.”
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