Next delivers profit of over £900m; more MADE expansion

Fashion and home furnishings retailer Next have reported an increase in performance, delivering its highest ever levels of sales and profit.

According to its results for the year ending January 2024, total group sales rose 5.9% to £5.8bn from £5.5bn in 2023. Pre-tax profit resulted at £918m, up 5%, compared to £875m recorded in the previous year.

This marked a £3m uptick ahead of its guidance of £915m shared in January, largely due to better-than-expected clearance rates of Sale stock in January.

In store retail sales represented £1.8bn, flat on the prior period, while online sales rose 5% to £3.1bn. Online profit rose 10.8% to £506m.

Within its licensing division, Next said that total Home, which includes MADE, sales were up 57% to £9.7m from £6.2m. Commenting on MADE, the retailer added: “Our MADE website launched earlier this year (MADE.com). In addition, we have opened a dedicated showroom in Leeds (Redbrick Mill) as well as adding dedicated retail space in our Sheffield NEXT Home store.

“In the year ahead we are planning to expand our product ranges with a focus on furniture and lighting. We will be investing more on targeted marketing campaigns with the aim of growing and reactivating the MADE customer base.”

Next said that a focus on warehousing has been key to driving its online growth. “Our new Elmsall 3 flat-packed stock warehouse will increase NEXT Online’s current capacity by c.50%. Within the shell of the building, we have void space which could add a further 34% of current capacity when fitted out. The project has been delivered in three phases, two of which have been delivered, in time and on budget.”

“The final stage will go live in October this year and facilitates a more automated packing process. This reduces the time required to pack a parcel by 36%. “We aim to ramp up this automation throughout the year so that it accounts for 50% of our packing by February 2025,” Next said.

During the period, Next reduced its store estate from 466 to 458 and said it will continue to open and close a small number of stores, but does not anticipate any material net change in its retail selling space in the year ahead.

On global expansion, Next added: “Following a very encouraging trial, we are actively working with Nordstrom (an important US multi-channel retailer with revenues of over USD14bn). We have agreed terms with a second major US retailer and are in active discussion with several others. It is very early days, but the signs are encouraging.

“We are also close to finalising a franchising and licensing agreement for NEXT in India and are in very early-stage conversations for similar arrangements in other Asian territories.”

Looking ahead, Next concluded: “We expect full price sales for the full year to be up +2.5%. Within the first half we anticipate that the quarters will perform very differently, with sales in the first quarter up +5% and flat in the second. Total Group sales, including subsidiary companies and equity investments, are expected to grow by +6.0%.”

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