Next, which has 500 stories in the UK and 200 stores overseas said a huge rise in its pre-tax profits meant it could absorb next month’s hike in employers’ national insurance (NI) and an increase in the legal minimum wage.
The store’s boss Simon Wolfson said Next was able offset a £70 million rise in its costs by switching its stores to cheaper electricity although it would need to raise some of its prices.
Next, whose pre-tax profit rose 10.1% to £1.01 billion during 2024, was last summer dubbed one of the Britain’s best run retailers by analysts who spoke to Reuters.
Wolfson, Next’s chief executive said the company had the size to absorb the changes but told The Guardian that the government needed to stop burdening big business with excessive regulation.
He said in a lengthy statement: “Policymakers should not allow themselves to believe that burdening ‘big’ business does not impact the lives of millions of ‘ordinary’ people: it does – consumers through higher prices, workers through fewer jobs, and savers through lower pension income.”
Aarin Chiekrie, equity analyst, Hargreaves Lansdown said Next’s success was down to its expansion overseas.
“Overseas sales continue to grow at an eye-watering pace, up at double-digit rates. Given the untapped size of foreign markets, there’s a big opportunity ahead if Next can execute its expansion plans well.”
Richard Hunter, head of markets at interactive investor said: “Next has jumped on its increasing international presence and has increased its website functionality, improved its digital marketing and developed third-party relationships.”
“The overseas third-party distribution network enables the Next brand to reach new markets, and even at this relatively early stage of its ambition the group has highlighted a rise of 350% in international website sales over the last ten years and an increase of 25% in full-price online sales over the last year.
He added: “The Next naysayers have missed out on some stellar returns, but may not yet have entirely missed the boat. The share price has risen by 122% over the last five years and by 59% over the last three. The performance over the last 12 months has been a more pedestrian increase of 7%, as compared to a gain of 9.6% for the wider FTSE100, as the price has caught up with its historic valuation, giving extra punch to the warm reception which the shares have received at the open.
“This has in part led to a market consensus which remains stubbornly stuck at a hold, albeit a strong one, which has been the case for some considerable time. Even so, if this level of inexorable progress is maintained as has been the case to date, those who doubt the company’s prospects may continue to do so at their peril.”
