Next warns of a tough year ahead

The retailer posted a 3.8​ per cent​ fall in underlying pre-tax profits to £790.2​m for the year to January - the first fall in profits since 2008/09 at the height of the financial crisis.

Next confirmed it had hiked prices by 4​ per cent​ on average for the first half of the year and warned prices would remain under pressure in the second half from rising buying costs caused by the Brexit-hit pound.

Chief executive Lord Wolfson said: "The year ahead looks set to be another tough year for Next.

"We remain clear on our priorities going forward. We will continue to focus on improving the company's product, marketing, services, stores and cost control."

Richard Hunter, ​h​ead of ​r​esearch at Wilson King Investment Management, ​said “Next is in a difficult spot at the moment, with both sectoral and specific issues to confront.

​"​On a wider basis, the weakness of sterling has lifted import costs, whilst there may also be a trend developing of the consumer moving spending away from clothing. Meanwhile, the flagship Directory business is no longer enjoying the field to itself, with intense competition resulting in pressure on both customer numbers and inevitably margins.

​"​Some of the sting had been taken out of the story by Next’s lower profit guidance in January; nonetheless, the outlook from the company is extremely cautious.​"