Fashion chain Next is close to reaching a tipping point with more than half its sales being made online as it unveiled a bullish outlook on a no-deal Brexit.

The retailer expects its stores to deliver less than half of total sales this year - and only 30pc of group profit - as a surging online performance counters a decline on the high street.

It means website sales will have nearly tripled to £2.1bn over the past decade, marking a critical moment in its attempt to keep step with shifting shopping habits.

Lord Wolfson, Next chief executive, said the environment remains “extremely challenging”, but it had reached an “important point” in its transition towards becoming an online platform that includes stores. However, he added that the process would continue to be “arduous and hard”.

The chief executive voted in favour of Brexit credit: Next Plc

It came as Next hiked its profit guidance for the year after the summer heat wave countered tougher trading at the beginning of 2018. Profit is set to be £10m higher at £737m due to better than expected sales in August.

The brighter outlook was underpinned by a 4.5pc rise in full-price sales for the half-year. Next had feared that an uptick in July sales would be offset by declines in August and September as customers brought forward their summer spending. However, the subsequent fall failed to materialise.

As a result, pre-tax profits rose 0.5pc to £311.1m for the six months to July 31, just missing expectations of £315.3m. Revenues lifted 4pc to £1.96bn for the period.

Lord Wolfson, who backed Brexit, included a comprehensive statement on the impact of leaving the EU alongside the results.

A no-deal Brexit would not pose a “material threat” to its operations or profitability, he said, but added that prices for Next shoppers would rise by 0.4pc in a worse-case scenario where the Government does not change tariff rates.

He said disruption or delays at the ports was the single biggest risk posed by a no-deal Brexit and called on the Government to provide information on how it plans to prevent such a scenario. A sharp fall in the value of the pound and increased tariffs would also pose a threat, he added.

View more!

Earlier this year, Next warned that trading conditions in 2017 were the toughest for 25 years, with consumers moving to online rivals.

On Tuesday, it said in-store retail sales had fallen by 6.9pc to £925.1m for the six months to July, while the online business soared 16.8pc to £892.3m.

Laith Khalaf, senior analyst at Hargreaves Lansdown, said: "It’s the digital business driving sales forward, though this actually works hand in glove with a broad high street network, as around half of online sales are collected in store.

"Next is unusual in that it’s still opening outlets, though it’s keeping its lease terms flexible and negotiating rent reductions where possible."

He added: “The positive figures announced by high street bellwether Next are likely to be perceived as a sign that the UK retail environment is recovering, however Next has made wise operational decisions which have aided growth and enabled the retailer to capitalise on changing shopping habits.”

The distress on the high street has already hit some high profile names, including John Lewis, House of Fraser and Moss Bros last week.

Despite the continued rise of the online business, Lord Wolfson said there were no plans to wind down the circulation of the Next catalogue, which is still sent to more than a million customers.

The retailer also announced Caroline Goodall will be stepping down as a non-executive director after six years. Ms Goodall will be replaced by TalkTalk chief executive Tristia Harrison.