Profits at Next set to overtake Marks & Spencer

 
Kasmira Jefford
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PROFITS at fashion and homeware retailer Next are set to top those at rival Marks & Spencer for the first time after the group rounded-off a buoyant year of sales with a strong Christmas trading period.

The group, which has over 800 shops in the UK and overseas, said sales rose 5.5 per cent in the year to January thanks to new store space and strong growth across its online and catalogue business, which rose by 11.8 per cent.

Higher revenues helped drive pre-tax profits 11.8 per cent higher to £695.2m, ahead of the £628m profit rival fashion and homeware retailer Marks & Spencer is forecast to report for its financial year.

Next’s chief executive Lord Simon Wolfson said that while the consumer economy has steadily improved, conditions are likely to remain “far from buoyant” and that the risk of a rise in interest rates could derail a consumer recovery.

He warned that the economic recovery was being fuelled by an unsustainable rise in consumer borrowing, with customers’ net borrowing amounting to further billions during this year.

“If anything has been learnt from the last ten years it is that credit cannot continue to grow faster than wages forever,” he said.

The retailer has forecast sales growth of four to eight per cent in its 2014-15 year, with profits rising five to 11 per cent to £730m-£770m and total shareholder returns of 10-16 per cent.

Next’s shares, up 61 per cent over the last year, rose 2.28 per cent.

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