British fashion retailer Next has warned that retail could be facing its "toughest" year since the onset of the financial crisis in 2008.

The group has reported a 5% increase in its underlying pre-tax profits, growing to €1.036bn for 2015.

However, Next is not expecting similar results in 2016. It is bracing for a global economic slowdown and expecting profits to fall by up to 4.5%.

Despite the increase in profits, Next shares fell by 10% in early trading after the firm warned that it "may well be the toughest we have faced since 2008."

The company, like many other retailers, is facing pressure to develop its online platforms to deal with changing consumer behaviour.

"In many ways, we have more to do than ever before with complex challenges to our working practices across product, marketing and systems," the company commented.

"It may well feel like walking up the down escalator, with a great deal of effort required to stand still ... It will not be the first time we have felt this way, and our experience is that the effort put into improving the business in tough times can pay handsome rewards when conditions improve," the downbeat note continued.