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Online drives Next growth, despite falling store sales

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Online growth helped Next to post a sales rise in the first half of its financial year, despite falling store sales.

Sales from the directory arm of the fashion retailer’s business, which sells primarily over the internet, rose by 8.3% in the 26 weeks to July 27, the company said in a trading statement today. At the same time, store sales fell by 0.9%, taking Next brand sales to an overall rise of 2.3%. Sales from new store space grew by 1.8% over the period.

Separating out the part of the period that ran up to the beginning of its sales on July 12, directory sales grew by 9.9% while store sales remained flat. Overall Next brand sales grew by 3.7%.

There was evidence, said Next, that consumers were becoming more spontaneous in the way they buy. “As a result,” it said, “weekly sales are more affected by short-term events such as a change in the weather, the timing of Bank Holidays and school holidays.” While it did not expect this to hit overall spending, it did mean that short-term consumer trends were harder to read.

Next said higher full-price sales and lower markdown had added £10m to first-half profits and it now predicted that full-year pre-tax profits were likely to come in at between £635m and £675m, between 2.2% and 8.6% up on the same time last year.

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