Next, guided by CEO Lord Simon Wolfson, has recorded substantial growth and is strategically expanding internationally and in premium categories.
- Next’s sales grew by 8% to £2.9bn, with pre-tax profits up by 7.1% to £452m for the first half of 2024.
- A significant portion of Next’s profits, over £120m, is attributed to stronger than anticipated overseas sales, particularly in Europe and the US.
- The company plans to bolster its US presence, especially in newly identified potential categories, following promising sales growth.
- Next’s domestic market remains stable, with a focus on premium and affordable luxury segments to cater to evolving consumer interests.
Next’s latest financial figures reveal an 8% increase in sales, reaching £2.9bn, and a 7.1% rise in pre-tax profits to £452m. These results have prompted the company to adjust its full-year profit forecast upwards by £15m, anticipating a total of £995m. This growth underscores the brand’s strong performance and strategic foresight.
A remarkable aspect of Next’s financial success is the £120m in profits derived from ‘better than expected’ overseas sales, which alone contributed £433m to full price sales in the half-year leading to July 2024. Mainland Europe, which saw a sales increase of 38% year-on-year to £206m, and the US market, where sales surged by 67% to £8m, have been pivotal in this expansion.
In the US, Next has commenced sales of its childrenswear line through Nordstrom. Although Wolfson acknowledged the numbers are modest, he expressed optimism about future growth, particularly across more product categories. He stated, “The numbers are better than we or they thought they would be, but they’re still small numbers.”
Closer to home, UK sales grew modestly by 1% year-on-year. Wolfson expressed satisfaction with the brand’s domestic strategy, emphasizing opportunities within licensing, third-party brands, and the Next Total Platform, which provides an infrastructure solution for ecommerce operations.
Next is making strategic inroads into the premium and affordable luxury market to better serve aspirational consumers. This pursuit includes a strategic investment increasing their stake in Reiss from 72% to 74%, and the upcoming launch of a new ecommerce platform, Seasons, featuring brands like APC, Ganni, Joseph, and others, launching as a trial before Christmas.
While there is a cautious approach to acquisitions, notable movements include the increased investment in Reiss and acquiring a 16% share in the homeware brand Rockett St George. Furthermore, Wolfson addressed potential store closures due to a legal ruling on equal pay, clarifying that store profitability will dictate these decisions, dismissing any notion of these being a threat.
Next continues to leverage strategic insights and market opportunities to fortify its growth journey.
