Next: Group Sales Rise By 3.7%

Next has reported on half-year sales, covering the six months ended 31st July 2019.

Total Group sales were £2.06bn, up 3.7% on the previous year.  NEXT Brand full-price sales were up +4.3% and Brand total sales (including markdown sales) were up +3.8% on last year.  

Sales from retail stores declined by 5.5% to £874m, while online sales exceeded the £1bn mark, up 12.6%.

Group profit before tax was up 2.7% to £320m, with online contributing £175m (up 8.4%) and retail stores £56m (down 23.5%). 

Next is declaring an ordinary interim dividend of 57.5p per share, which is up +4.5% on last year and the company is maintaining its guidance for the full year, for profit before tax to be £725m (up +0.3% on last year).

Simon Wolfson, CEO, said:

"In our view, the online shopping revolution is not just about home delivery or even price, it is about the explosion in choice it gives consumers. Online retailers can deliver goods nationwide with a relatively small quantity of each item held in one central location. In addition, the barriers to entry for new fashion brands have never been lower. In today’s world, new brands can sell their products through third-party websites (such as NEXT’s LABEL) without any investment in expensive retail, warehouse or online infrastructure. The result is that customers, in every corner of the country, can now access a choice of goods, breadth of sizes and selection of brands that no single High Street could ever contain.

"However uncomfortable this change may be, it is important to keep in mind that ultimately it is great for the consumer and so in the long run it should be good for our industry. Whatever happens to the High Street, the people walking down it will be wearing clothes and will continue to decorate and furnish their homes. If NEXT is to thrive in this new online world we must continue to evolve.

"In terms of Retail stores, the situation is not quite as one way as it might first appear. Fifty per cent of Online orders are delivered to our stores. For some customers, home delivery is inconvenient; others prefer to avoid the £3.99 cost of home delivery (store deliveries are free). Returns are a central part of our Online service and 82% of returns come back through our stores. It is counter-intuitive, but the fact is stores have become an important part of our Online service, though their rents are way out of kilter with the value they provide as collection and returns centres. So, if stores are to remain open, Retail rents must fall and fortunately that is exactly what they are doing."

Source : Insight DIY Team and Next

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