Profits rose at Next in the first half of the year as the retailer shifted more stock at full price therefore reducing its markdown sales.
Operating profits grew 7.2% to £285m in the six months to July 27 helped by a 3.9% increase in full price sales. Next went into its Sale with 18% less stock than last year and so markdown sales were therefore 13% down on last year.
Sales at the high street retailer rose 2.2% to £1.68bn boosted by additional retail selling space and increased online sales. Increased selling space added 1.8% to total sales.
Sales across Next’s retail arm dipped 0.9%, while at the Next Directory, which encompasses online, sales rose 8.3%.
Next chief executive Lord Wolfson said: “The Group has made good progress in the first half, delivering profits at the upper end of our expectations. Looking ahead the economy looks set to improve moderately, albeit at a slow pace and with the risk that credit easing may not translate into growth in real earnings.”
He added: “We remain confident that we can deliver growth in sales, profits and earnings per share for the full year.”
The retailer said that over the last few years there has been much greater volatility in sales, with consumers spending closer to the point at which they need new clothes. Sales were therefore particularly strong during July when the weather became much warmer. However, during August the warm weather worked against some of its clothing ranges, which Next said was because it did not plan enough warm weather transitional stock.
The chain said for next year it believes there is some opportunity to sell more transitional stock in the early weeks of both the spring and autumn seasons.