How profits plunged at fashion chain Next last year

However, the group also raised its profit forecast for the current year, as it hailed soaring online sales in the past eight weeks.

Next told investors that online sales over eight weeks from the start of February were “stronger than expected” and more than 60 per cent ahead of the same period two years ago.

The retailer said it is therefore expecting to post a pre-tax profit of £700m for the current financial year, up from its previous target of £670m.

Outlining its outlook for the year, the group said it believes the consumer economy, at least in the short term, “will be healthier than many presume”.

Chief executive Lord Wolfson said it seems likely that a “combination of pent-up demand along with a healthy overall increase in personal savings” will help to buoy consumer spending.

The group said it is also working on the assumption that vaccine rollout will mean that its stores will remain open for the rest of the year.

However, it said it is unlikely to meet its sales and profits guidance for the year if this does not prove correct.

It came as the company said that its pre-tax profits slid by 54 per cent to £342m for the year ending in January, compared with the same period last year.

It said this slump was driven by Covid-19 costs and lower sales due to lockdown restrictions, with group sales dropping by about 17 per cent to £3.6bn for the year.

In a statement, Next chairman Michael Roney said: “I believe that in difficult times there is a clearer separation between the stronger corporate performers and the weaker ones.

“This result is due to the formation of a good management team and the establishment of robust processes during less volatile periods.

“Our continued investment over many years in our people and our systems has shown resilient results in the past year.”

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