Next has achieved its first annual profit of £1 billion but has warned of growing risks to the UK economy. The retailer reported a 10% increase in pre-tax profits, reaching just over £1 billion, despite facing one-off expenses like a £15 million pension charge. Sales rose by 8.2% to £6.3 billion, largely driven by strong international growth and sales of other brands. Next’s chief executive, Simon Wolfson, expects the company to earn £1.06 billion next year, £20 million more than previously forecasted. He stated that despite being optimistic about the company, the risks to the broader UK economy are increasing. Wolfson expressed concerns over upcoming tax hikes in April, which he believes will weaken the UK employment market and diminish consumer confidence. To mitigate the rising costs of labor due to higher national insurance and minimum wage rates, Next plans to implement new technology in its warehouses. The company also anticipates additional costs of £67 million from national insurance changes and the increased minimum wage, along with a £6 million packaging tax. However, these costs will be partially offset by cost-saving measures such as improved operational efficiency, cheaper electricity, and a 1% price increase. Wolfson emphasized that despite the significant profit, Next’s shareholders cannot bear unnecessary expenses, arguing that burdens on big businesses ultimately affect ordinary consumers, workers, and savers. In terms of product sales, Next’s own-brand sales in the UK remained flat, with declining store sales but a rise in online sales. The growth mainly came from other brands that Next now owns, such as FatFace and Reiss, as well as third-party brands sold online. Next also disclosed that no new brands were acquired during the year, and they have decided to offer an online warehousing logistics service to utilize spare capacity in their warehouses.

Source: https://www.theguardian.com/business/2025/mar/27/next-reports-1bn-in-annual-profits-for-first-time-but-warns-on-uk-economy