Christmas Sales Surprise for Next

Sales at Next have unexpectedly risen over the Christmas period, prompting the fashion retailer to raise its profit forecast.

Cold weather boosted trade ahead of Christmas, sending full-price sales up 1.5% – far better than the 0.3% fall it had expected.

A 13.6% rise in online sales offset a 6.1% decline in store sales in the 54 days to 24 December.

As a result Next said annual profits were expected to rise by £8m to £725m.

That remained considerably lower than the £790.2 million for the year to January 2017.

Shares rose 7.5% to £48.38, valuing the company at just over £7bn..

The retailer warned that many of the challenges it faced last year, such as subdued consumer demand and lower spending on clothing, would persist in 2018.

However, chief executive Lord Wolfson said the retailer was now much more optimistic about its prospects compared with this time last year when it issued a profit warning.

He also argued that declining in-store sales did not mean the death of the high street.

“Retail will remain challenging and the shift from retail to online will continue, but half of our online orders are delivered to a store, so this is not the end of the high street as some people have said,” Lord Wolfson said.