Next has announced profits are down in its financial results year ending January 2009.

Next plc has announced its 2008 financial results, revealing profits down more than 14% and has warned that the economy and weaker pound could affect the price of its clothing.

Group profits fell to £429 million before tax, while retail sales and profit were down 2.5% and 9.7% respectively. Sales, however, from the retailer’s Directory grew – possibly due to the provision of credit on Next Directory accounts – while internet orders accounted for more than 60% of the company’s orders.

Simon Wolfson, Next’s Chief Executive, said: “2009 presents a double challenge. Weakness in the general economy means we must plan for a fall in like-for-like sales for the full year. In addition, the weakness of sterling will put strong upward pressure on cost prices.

“The outlook for the consumer economy remains challenging and, as we have said before, the first half will be particularly tough. National earnings will be hit by increasing unemployment. For those in employment, we anticipate there will be less opportunity for overtime and bonus payments.”

Wolfson anticipated 2009 like-for-like sales would be down between 6% to 9%, and its Directory sales marginally down 2%. He warned that if the state of the economy continued, with a weakened pound and higher VAT and business rates, the risk of inflation could increase.

However, he was keen to remain optimistic: “Whilst we remain cautious in our outlook for the year ahead, we believe that perhaps the economic gloom has been overdone. At some point, the economy will begin to recover and we must focus on ensuring Next’s stores, personnel and brand emerge in good shape.”