Next (LON:NXT) has reported its first fall in annual pre-tax profits since the recession. The retailer has said that it remains “extremely cautious about the year ahead”.
Profits fell 5.5 percent to £790 million as the full price sales dropped 1.3 percent during the year.
Next has that 2016 saw a “combination of economic, cyclical and internal factors working against us” that affected profits and will continue to do so in 2017.
Rising costs seen after the collapse in the value of the pound after last year’s referendum means Next expects pressure to continue into the second half of the year.
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.”
In preparation, the FTSE 100 retailer revealed it had raised shop prices by 4 percent to offset the higher import costs from the weaker pound.
In separate news, John Barton, the retailer’s chairman, has announced he will be stepping down from the retailer’s board after 15 years. He will be replaced by deputy chairman Michael Roney.
“The strength of the Group is built on the hard work and dedication of all the people who work for Next. I would like to thank them all for their contribution throughout the year. I have been chairman of Next since May 2006. In 2008 our profits fell and our share price halved; by the following year our profits had started to grow again and our share price recovered strongly in the following years. Trading conditions in the year ahead will continue to be tough, however, I believe that by focusing on our core strengths, as we did during 2008, we will see Next emerge from this period stronger than before.” said Barton.