Next today underlined the importance of multichannel to its business, as it looked to identify the sources of its future growth.
Reporting results for the year to January 2013, the multichannel fashion retailer said that while its predominantly online Directory business was still growing faster than sales through stores, the differential was narrowing. Instead, it put the emphasis on the way the two sales channels complement each other.
“The two businesses continue to work well together and support each other in many ways,” said Next chief executive Lord Wolfson in the retailer’s end of year statement.
“For example, over 20% of Directory sales are delivered through our stores and over 60% of the returns come back that way.”
In the year to January 2013, Next sales grew by 3.1% to £3.5bn, thanks to online sales growth of 9.5%, to £1.2bn, while store sales stayed flat at £2.2bn. Pre-tax profits before exceptional items rose by 9% to £622m, and profit attributable to the Next Directory grew by 15.1% to £302m.
The company is now looking to grow sales both online and through international expansion. Pointing to “good opportunities for growth” in the UK, Next said: “In the UK, growth is driven by the wider online market and by improving delivery services.” Recent steps towards improving those services in the last year included the move to a 10pm cut off for standard next-day delivery and enabling collection of next-day delivery to store items after 12.30pm, from 4pm previously.
Meanwhile international online sales grew to £54m, from £33m last time. The company now sells direct to 60 countries and expects to grow online international takings to at least £70m in the next year.
Elsewhere the company said it would also be looking to grow through profitable new space, improved product ranges, a focus on cash generation and rigorous control of costs.
Lord Wolfson said: “Next has performed well in a difficult year, delivering good growth in sales and profits.” He added: “The year ahead looks no less challenging but the group is well prepared and has further opportunities for growth.”
