Business overview

The NEXT Brand

The NEXT retail chain was launched in February 1982 and the first store opened with an exclusive coordinated collection of stylish clothes, shoes and accessories for women. Collections for men, children and the home quickly followed. NEXT clothes are styled by its in-house design team to offer great style, quality and value for money with a contemporary fashion edge.

Today NEXT trades from more than 500 stores in the UK and Eire and almost 200 stores in more than 40 countries overseas. Over the last few years several larger format fashion and home stores have opened across the UK and, in August 2011, NEXT opened its first combined fashion, home and garden store at Shoreham-by-Sea.

The groundbreaking mail order operation NEXT Directory launched in 1988 with a hardback book containing 350 pages, creating the blueprint for catalogue retailing. There are almost 1,400 pages in the Spring Summer 2014 book offering extensive collections for men, women, children and everything for the well dressed home.

Online shopping was introduced in 1999 and the entire book became available to shop from on the internet, page by page – another first in home shopping in the UK. NEXT Directory now also serves customers in around 70 countries outside the UK.

NEXT continues to improve customer service, introducing new initiatives such as next day delivery as standard for NEXT Directory orders placed before 10pm.

Customers may collect or return items at any of our stores nationwide should this be more convenient, and a new in-house delivery service has been set up to deliver large Home items with the ability to deliver at weekends. As well as placing orders, customers are able to check their accounts and make payments online.

Other group businesses

NEXT Sourcing has operations in mainland China, Hong Kong, Sri Lanka, India and the UK engaged in the design, sourcing, buying, merchandising and quality control of NEXT products.

Lipsy designs and sells its own branded younger women's fashion products.

 

Business strategies and objectives

The primary financial objective of the NEXT group is to deliver long term returns to shareholders through a combination of sustainable growth in earnings per share and payment of cash dividends. NEXT believes this objective is best achieved by continuation of the following strategies:

  • Improving and developing NEXT product ranges, success in which is measured by sales performance.
  • Profitably increasing retail selling space. New store appraisals must meet demanding financial criteria before the investment is made and success is measured by achieved profit contribution and return on capital against appraised targets.
  • Increasing the number of profitable NEXT Directory customers and their spend, both in the UK and through international online sales.
  • Managing gross and net margins through efficient product sourcing, stock management and cost control.
  • Maintaining the Group's financial strength through an efficient balance sheet and secure financing structure.
  • Generating and returning surplus cash to shareholders by way of share buybacks or, more recently, special dividends.

Corporate responsibility

For NEXT, corporate responsibility means addressing key business-related social, ethical and environmental matters and ensuring we run our business in a responsible way. We see corporate responsibility as a key element of how we conduct our business as we believe it makes good business sense. Further information can be found on the corporate responsibility pages of our website.

Key statistics from continuing business

Year ended January 2014 2013
Group revenue £3.7 billion £3.5 billion
Group profit before tax (before exceptional gains) £695 million £622 million
Total employees 52,533 54,507
Total full time equivalents 28,568 28,301
UK & Eire NEXT stores - number 541 540
UK & Eire NEXT stores - sq. footage 7.0 million 6.7 million
Average active Directory customers 3.7 million 3.3 million
Share buybacks - number of shares 6.2 million 7.5 million
Share buybacks - value £296 million £241 million

Ventura, the Group's customer service management business, was sold for £65m in July 2011. The figures above relate to continuing operations and Ventura is therefore excluded from both years. All figures from January 2014 Annual Report & Accounts.

 

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