Simultaneously with the publication of the annual results, the company revealed an updated forecast for the current year according to which the profit before tax for the year will fall by 7.6%. “The year ahead looks challenging,” admitted CEO Simon Wolfson. The company, which operates about 500 branches and an online sales platform, also announced that it will continue to raise prices, with prices expected to rise by 7% in the spring and summer, and 3% in the fall and winter.
The retailer already raised prices last year due to rising production costs and the weakening of the British currency. However, Wolfson told analysts that shipping prices are falling and in his estimation the UK will “pass the peak of inflation” towards the end of the year. “When we get better prices we will pass them on to customers … we want to stay competitive in the long run,” Wolfson said.
Next also continued its acquisition spree and last week purchased the bankrupt British lifestyle brand Cath Kidston for £8.5 million. The deal includes the company’s brand name, website and intellectual property, but Next is expected to close its stores. In recent months, it has Next has made several acquisitions of collapsing retailers, including the online furniture chain Made.com it bought in November for £3.4m and the Joules chain it paid £34m for in December.