Next Directory reported a 17% sales increase for the quarter, while retail sales were down 3.3%.

Overall, the home and fashion retailer reported a 3.3% increase in sales for the quarter, with new space compensating for slightly weaker underlying retail sales. Next said the figures were in line with its performance in the first half, resulting in a year-to-date sales increase of 3.2%.

Excluding new space, retail sales were down 2.3% year-to-date, while Next Directory online reported a 15.8% increase for the same period.

Reporting its figures for the first half ended July 2011, Next said sales in the homeware market had been poor, impacted by a slowdown in the property market and consumers reining in spending on big-ticket and discretionary items.

However, the tough climate has freed up retail space, allowing the chain to grow its home offer with standalone home outlets and a new large-format store in Shoreham. The move has seen Next include more 'third party fitted products', including bathrooms, kitchens and other light DIY products, such as paint, carpets, tiles and wooden flooring. The retailer has also introduced a garden centre trial. If successful, the new initiatives are expected to boost Next's home business and, in turn, bolster retail sales going forward.

Since its half-year results, the company has tweaked its full-year pre-tax profit prediction slightly, from a forecast of between £545m to £590m, as previously reported, to a range of between £550m and £585m.

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