High street clothes retailer Next has said its online Next Directory business was vital in helping plug a sales gap as store revenues fell in the run up to Christmas.

Next experienced a 2.7 percent dip in store revenues in the five months to 24 December. But online revenues for the period grew 16.9 percent.

In a statement to investors, the company said that the "strong performance of Next Directory continued to compensate" for sliding sales at stores.

While the company did not disclose revenue figures, it said total sales rose 3.1 percent thanks to the benefit of online trading. It expects full year profits to be approximately £565 million.

Next warned of a continued difficult retail environment this year, as consumers curtail their spending. It said it would stick with a five point plan to tackle this, including growing its online business, "both in the UK and overseas", as well as controlling costs and improving the success of newly-opened stores.

Last July, as Next announced its half year results, it addressed questions over why it was expanding retail space when store revenues were falling and online sales were strongly supporting group revenues. The company said that the retail presence was crucial in boosting online sales and keeping the brand visible for people who visit the high street and later shop on the internet.

Additionally, it said, a large number of customers reserve items online and then collect them in store.

In 2010, Next signed a network deal with Cable & Wireless covering technology that underpins ordering, stock management and application performance for the online operation and over 500 high street stores.

Following extensive investment in its processing and supply chain systems, Next is able to process orders up until 9pm for delivery the next morning.