Next is approaching a £1bn full-year profit as it observes significant overseas sales growth.
- In the latest interim financial report, Next’s sales escalated by 8% to £2.9bn and profit before tax increased by 7.1% to £452m.
- Notable growth in mainland Europe and the US is driving Next’s focus on international markets, exceeding prior expectations.
- CEO Lord Simon Wolfson highlights the potential of expanding premium and affordable luxury categories to cater to aspirational consumers.
- Next plans to launch a new ecommerce platform featuring premium brands later this year.
Next is on track to achieve nearly £1bn in full-year profits as reported in its latest financial statement, attributed largely to a notable increase of 8% in sales amounting to £2.9bn. Accompanying this sales surge was a 7.1% rise in group profit before tax, reaching £452m.
The briefing by CEO Lord Simon Wolfson highlighted that a significant portion of the anticipated full-year profit, over £120m, is expected to come from overseas sales which were better than projected, contributing £433m in full-price sales during the first half of 2024.
A 38% year-on-year increase brought sales in mainland Europe to £206m by July 2024, marking it as a critical region for growth. Furthermore, the US market showed a 67% surge in sales, especially in the childrenswear sector through Nordstrom, with discussions to broaden product categories ongoing.
Domestically, the brand faces some limitations, largely dependent on licenses, third-party brand arrangements, and the Next Total Platform, which offers logistical and IT support for ecommerce ventures. Even with only a 1% growth in UK sales, Wolfson remains optimistic about the brand’s standing within the domestic market.
In response to aspirational consumer demands, Next is enhancing its premium and affordable luxury segments. The acquisition of a further 2% stake in Reiss and the setup of a new ecommerce platform, called Seasons, before Christmas, with brands like APC and Marc Jacobs, signifies this strategic orientation.
Wolfson also addressed the potential impact of the recent equal pay legal case on store operations, noting that closures would be dictated by individual store profitability rather than as a retaliatory measure, reinforcing that profit forecasting is central in retail decision-making.
Next’s strategic focus on international expansion and premium offerings aims to sustain its robust growth trajectory.
