Next: sunshine on a rainy day

It's hardly surprising that retailer Next has been amongst the strongest risers on the FTSE 100 today.

It's about as hard to find a retailer trumpeting strong results as it is a solitary ray of sunshine at the moment.

Yet this is precisely what Next did this morning, announcing strong growth in its online and catalogue business.

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Investors doffed their rain-sodden caps to the firm and pushed shares up over 7%.

Beating expectations

Total sales for the first half were up 4.5% against last year, Next said, topping its own prediction of growth between 1% and 4%.

Like-for-like sales came in at 2%, beating some analysts' expectations of a rise of just 1%.

Sales at its online and catalogue Next Directory arm were up 13.3% on last year making up for high street retail sales which crept up just 0.2%.

The firm said sales from new space offsetting lower sales from like for like stores.

And it didn't stop there.

Next added that it was positive about its full year performance.

"We are modestly increasing and narrowing our sales and profit guidance ranges for the full year," the company said.

"We now anticipate brand sales growth of +2.0% to +4.5% and group profit before tax of £575m to £620m (previously £560m to £610m)."

Dark times

It has been a miserable first half of the year for retailers as economic fears and terrible weather have kept shoppers away from their stores.

A recent report by PriceWaterhouseCoopers found the number of insolvencies in the retail industry is growing very rapidly.

So it's telling that Next's 0.2% rise in high street sales was the cause for such joy.

Analysts said the secret of Next's success was clinging stubbornly to the middle ground, with a strong focus on core strengths and core customers, rather than chasing the value end of the market.

"Next has extremely strong sales channels, with online and the Next Directory genuinely complementing the physical stores," said James McGregor, director of retail consultants at Retail Remedy.

"The glorious summer we've had has also helped the retailer out, as people order from home rather than venture outside."

On top of this McGregor said the success of the company's online and Directory arms reflected the trust people had in the Next brand.

"They know that the things they order will be of the quality they expect - that's no mean achievement on behalf of the retailer," he said.