Next, the FTSE 100 clothing retailer, just reported a blockbuster year, minting £1 billion in profits.
The 160-year-old company sells everything from clothing to home furnishings. On Thursday, it became only the fourth British retail company to ever hit the £1 billion ($1.3 billion) profit milestone, amid sluggish economic growth in the country.
Next’s pretax profits were up by 10% year over year in the 12 months to January, while sales soared by 8% to £6.3 billion ($8.15 billion), thanks to a strategic pivot to online retail and a slew of high-profile brand acquisitions, including FatFace and Reiss.
This shift has expanded the avenues through which shoppers buy Next’s products. The British company’s winning streak has taken place against a tumultuous backdrop for U.K. clothing retailers as Brits tighten their purse strings on nonessential spending. British fashion brands, in particular, have struggled to survive, as seen with Ted Baker and Matches both going bust in 2024.
“Next is the envy of the retail sector. Once again it has upgraded sales and profit guidance, leaving its rivals in the dust,” Russ Mould, an investment director at AJ Bell, said in a note. “Next is typically a cautious outfit, preferring to under-promise and over-deliver, which makes its latest optimism a surprise given the fragile market backdrop.”
Next is considered a bellwether of U.K. high-street health, given its millions of loyal U.K. customers. Despite the upbeat earnings, the retail group warned that budgetary tax measures that kick in in April would compress consumer confidence. Next said it plans to hike prices by 1% this year to offset an increase in staff wages and other tax expenses.
It seems economic hardship won’t come in the way of Next’s growth, as it raised its profit forecast for the year ending January 2026 to £1.1 billion ($1.42 billion).
Over several years Next has simultaneously tackled costs while offering more products at its stores, which, along with its brand investments, have helped prop up earnings. While its U.K. business drives much of its sales, Next’s overseas presence is small but growing.
The British company plans to double down on its lucrative e-commerce business, which offers online retail help to third-party brands. In 2024, the profits from this division were up 24%, amounting to £13 million.
Next has consistently ranked as the U.K.’s top retailer, and last year, the London-listed company crossed the £900 million profit mark.
Simon Wolfson, Next’s long-serving CEO for 24 years, has been the architect of the group’s turnaround. Next was founded in 1982, but its history traces back to the 1860s when a tailoring company bought women’s wear group Kendall & Sons. It has expanded its retail footprint across the U.K., with over 400 stores.
