Next has announced a 9 percentrise in pre tax profits to £551million in the year ended January 2011. However the high street fashion retail giant has said that clothing prices could rise by 10 percent for Autumn 11 due to continuing inflation wage in the Far East and increasing commodity prices. It follows an increase of 8 percent for Spring 11.
Next, chief executive, Lord Wolfson, said that Next is working to offset inflationary pressures and had found cheaper sources of supply and had continued to place larger orders to get better prices. He said that the retail giant was always looking at new suppliers, new designs and new colours to offer the best value to their consumer.
Lord Wolfson also admitted that ‘things are likely to get worse before they get better,’ this year but that they were ‘well positioned’ in the retail environment for the coming year.
The high street fashion retail giant Next also called for business’ to adapt to a fundamentally changed retail landscape dominated by inflation and lower consumer expenditure. Its a sentiment, which was echoed last year by Aurora fashions boss, Derek Lovelock, who declared the face of the retail landscaped changed forever; ‘She [the consumer] will have less disposable income, she will buy less. If she is buying less, she will be wearing something more exclusive and she will be buying[exclusive items] more often. We believe this shift in consumer buying will happen.’ Tim Danaher, editor of Retail Week said about future trends, ‘Retailers are going to need fewer better shops – they are not going to need 200 stores any more. It’ll be more like 30 really good stores in prime locations backed up with a website.
Next boss, Wolfson, added; ‘ Retail in the UK is going to be different over the next few years. The consumer environment is likely to be dominated by the challenges of global inflation, public sector cuts, and limited growth in consumer credits. These factors mean that retailers cannot plan for never-ending growth in like for like sales that many have enjoyed over the last 15 years.’ He continued, ‘the retail industry must think differently about how we manage and grow our business with new avenues of growth, innovative ways to control costs and careful management of the healthy cash flows coming to the fore.’