UK fashion retailer Next posted healthy results today, but resisted over-optimism on its outlook for the year ahead, remaining cautious despite stores and online …
UK fashion retailer Next posted healthy results today, but resisted over-optimism on its outlook for the year ahead, remaining cautious despite stores and online both performing well.
In a results debrief with CEO Lord Wolfson, he told us this is because he expects to be up against tough comps from last year, when the retailer had warm weather and very strong collections on its side, explaining that it has now returned to a more “normal” trading pattern this year.
“It’s very rare for us to get all the collections within all our ranges right, but we did that last year. It’s not that there’s anything dramatically different about them this year, they’re just not as spot-on,” he said.
One of the company’s priorities this year is to continue to invest in its out-of-town stores; having last year rebuilt its Maidstone location with a new architectural design and a stone-covered façade. “We wanted to create a more distinctive look that felt like a grand public building,” Wolfson told us. “It’s important that as an industry we deliver better quality stores in these areas: just because a store is out of town doesn’t mean it has to look horrible.”
The company wants to change the perception of out-of-town retail by revamping existing locations and opening new stores which fit this new improved model. The next unit to open will be just outside High Wycombe this Easter.
Other developments include plans for a new iPad app and mobile site, but these are very much still in the pipeline. “Our digital strategy at the moment is all about making lots of small improvements rather than anything major. We want to get every component as good as it can be before figuring out what works best for our customer,” Wolfson said.
Next is also investing in mainland China, with plans to open a local distribution hub that will reduce lead times there from 14 days to just one or two days. In spite of this, Wolfson remains cautious in his approach, as the country currently represents such a small proportion of the business. “It’s still very early days,” he said. “In the context of Next, China is a tiny business: it represents less than a quarter of a per cent of the company’s overall trade.”