High street retailer turned multichannel giant, Next, has credited a cool Autumn for a 4% jump in sales, as it upgrades its profit forecasts again – for the fourth time in six months.
The Elite retailer reported online sales jumped 6.5%, and full-price sales also rose 3.8%. However a warm September, the joint hottest on record, negatively impacted its sales.
In a statement for the year up to 28 October 2023, Next said: “We believe the volatility in sales performance is a result of changing weather conditions rather than any underlying changes in the consumer economy.
“In an autumn season cooler weather is good for sales, warmer than average weather depresses sales.”
Next now expects full year profits to hit £885mn, up £10mn on the last guidance. The retailer recently added UK-based lifestyle brand Fat Face to its growing number of acquisitions.
This year it has snapped up the online furniture retailer Made.com from administration. Cath Kidston and Joules, which also encountered financial difficulties, were also purchased by Next. And it has taken on 44% of maternity wear retailer JoJo Maman Bebe, also striking up partnerships with Victoria’s Secret and Gap.
Read more: The RetailX UK Fashion 2023 report features an exclusive case study on how Next become an exemplar of modern multichannel fashion retail
It has not been such good news for fast fashion etailer Asos, which released its delayed results showing a £300m loss before tax. It will now shutter its Lichfield warehouse in a bid to save £20m a year, with reports suggesting it will also offload the Topshop brand.
The Bristol-based retailer will prioritise a shift ‘Back to Fashion’. It has already reduced stock levels by around 30% over the past year, but told investors it will cut stock numbers by a further 16% over the next year.
Asos will also invest £30m more on marketing, and plans to build “an always-on influencer programme”.
José Antonio Ramos Calamonte, chief executive officer of Asos, said: “FY23 was a year of good progress for Asos in a very challenging environment and I am proud of what the business has achieved. We have reduced our stock balance by c.30%, significantly improved the core profitability of the business, strengthened our balance sheet, and refreshed our leadership team.
“Encouragingly, stock that was brought in under our new commercial model over the summer months has performed strongly and this gives us the confidence to accelerate the rollout of our new processes. As such, we are taking decisive action in FY24 to clear stock brought in under our old model while substantially improving our speed to market and investing in our brand, reminding our customers what we’re really about: fashion.”
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