Fashion and homewares retailer Next has reported strong furniture sales due to the positive impact of the Laura Ashley brand.
According to its latest full year accounts for the year ending January 2022, Next said total Home category sales rose 142% to £91m from £37m (versus 2019/20), with new brand Laura Ashley performing ‘particularly strong’.
Laura Ashley was officially launched during March 2021 after Next secured a partnership with the brand following its administration due to the Covid-19 pandemic. The deal saw Laura Ashley reintroduce its furniture and homeware via Next’s stores and website.
Next stated that its Home Options display has increased by 59% to 15,400 from 9,700, while its third party licensing business, which includes Home products, generated sales of £40m last year. In Home, areas include upholstery, furniture, lighting, curtains, bedding and children’s bedroom furniture and accessories.
Furthermore, Next disclosed plans to improve direct dispatch from home suppliers with a new service being developed.
“For very large items, such as furniture, that are unlikely to consolidate with other items, it makes sense to dispatch the goods from our partners’ warehouses directly to our customers. The problem with direct dispatch is that it takes control of the delivery process (and problem resolution) out of our hands,” Next said.
“To address this issue we have developed NEXT-Direct-Dispatch (NDD). This service allows items to be delivered from our clients’ warehouses through NEXT’s nominated two-man carrier, giving us control over service and generally reducing delivery costs. 20% of our large direct dispatch items now travel through NDD and we aim to increase this to 90% in the year ahead.”
Overall, Brand full price sales were up +12.8% versus 2019/20 and Brand total sales (including markdown and Total Platform sales) were up +12.1%. Profit before tax was £823m, which was up +10% versus 2019/20. Over the same period, online sales rose 44.6% to £3.1bn, while retail sales declined 22.7% to £1.4bn.
Next confirmed that its expectations for inflation in like-for-like selling prices within its furniture and homewares category are to increase by 13% for the second half of the year.
Throughout the period, Next opened one new store and re-sited stores in another eight locations. Within the eight re-sites, there was one location where it consolidated two stores into one. The nine new and re-sited stores have performed well and “we expect the stores to make a net profit (before central overheads) of 22%”, the company said.
Next also closed 19 mainline stores, three of which came as a result of being “unable to agree acceptable new terms with landlords and two where the landlord did not wish to renew the lease due to redevelopment of the site”.
Six new Clearance stores were also opened and one closed, while looking ahead, Next added that it expects to reduce retail space by around -2%, due to the closure of around 15 stores.