Next profits to climb above £1bn for first time

Retailer receives autumnal sales boost despite competition from fast-fashion Chinese rivals

Next has said its profits are expected to top £1bn for the first time this year, as fast-fashion rival Shein fails to make a dent in sales.
In an update on Wednesday, the high street giant upgraded its forecasts for the third time since early August, having previously predicted profits of £995m.
Next said the latest upgrade stemmed from a strong performance in the three months to October 26, as quarterly sales rose 7.6pc year-on-year thanks to the early arrival of colder weather.
This meant people were buying more winter coats and jumpers earlier than last year, when unusually warm conditions dampened sales in September and October.
The upgrade means Next could soon rank amongst the few British retailers to surpass £1bn in profits, demonstrating the company’s strength amid competition from Shein.
Earlier this month, it emerged that the Chinese fast-fashion business was bigger than Boohoo in terms of UK sales, while it has also nearly closed the gap on Asos.
New Look said in its latest accounts that “disruption from new fast-fashion entrants” contributed to a drop in sales last year.
Analysts at Investec have said Shein, which is known for selling clothes at extremely low prices, is “sucking sales away” from other retailers.
According to GlobalData, it holds around 2.4pc of the UK clothing and footwear market, making it the 10th-largest player.
However, Next has so far managed to avoid shedding customers to Shein. It said it was expecting full-year sales to hit £6.27bn in 2024, buoyed by last year’s acquisition of a 97pc stake in FatFace.
Next previously also suggested it was benefiting from strong growth overseas, with sales bolstered by a “convergence” of international fashion tastes.
Lord Simon Wolfson, chief executive of Next, said last month that there had not been a “big change in sentiment” amongst customers ahead of the Budget.
He said: “If I look back at my experience over the last 25 to 30 years, generally the consumer tends to respond, not in anticipation, but when the reality hits. That tends to be the case.”