String of savvy investments helps Next to 'defy gravity' as retailer posts first £1bn profit

It may not be a fashion leader or the cheapest place to fill your wardrobe, but Next has quietly confirmed its place as a British success story by ringing up £1bn in profits for the first time.

- Sarah Butler

Next's growth came despite static sales of its own label in the UK as it expands the brand overseas and sells other labels it has invested in both online and in its stores.

The clothing and homewares retailer was created in 1982, when the men's suiting retailer Hepworths, founded in 1864 by the Leeds tailor Joseph Hepworth, bought the women's clothing chain Kendall & Sons and set about reinventing it.

It has since grown into an online behemoth selling fashion around the world and buying up stakes in a string of brands from Cath Kidston to Reiss and FatFace.

After a string of savvy deals in recent years, Next now controls the UK distribution of the US brands Gap and Victoria's Secret, creates Laura Ashley homewares, Ted Baker childrenswear and lingerie, and sells dozens of other brands it does not own via its website.

Yesterday the retail group, which is headed by the Conservative peer Simon Wolfson, said pre-tax profits had risen 10% to just over £1bn in the year to January after sales increased 8.2% to £6.3bn, led by strong overseas growth and sales of other brands.