Is Next the model for online sales?

Next (NXT) appears to be stealthily building its empire in a way that clearly uses lessons learned from its mail order past, but with a technological twist that brings it into the 21st century.

Its latest joint venture, announced just days ago, with fashion brand Gap, will see Next manage Gap’s UK website. It will also mean that Gap, which announced in July that it was pulling its 81 physical stores out of the UK, will retain some high street presence here, with its wares in Next stores.

This latest agreement is reminiscent of the one Next signed with clothing brand Reiss earlier this year and it also revolves around Next’s “Total” platform, designed to manage the e-side. – trades in the activities of other fashion brands.

It’s a smart setup, allowing fashion brands to retain creative control over their websites and keep their brand online, while all back-end operations are handled by fulfillment centers and data centers. calls from Next. Next will own 51% of the new company, Gap will retain 49%.

These deals highlight the continuous change online for retailers and, probably more importantly, the need to act quickly. Next entered the mail order business in 1986 with the acquisition of Grattan’s, then launched Next Directory two years later. Alongside its “A brand; two ways of shopping strategy ”in 1993, it was the first true cross-sell and door-to-door format.

Next has earned its stripes and this has been proven by its pandemic performance. When it struck and consumers were stranded, the retailer was one of the first to energize its online shopping offering and it soon became clear that its resilience contrasted sharply with that of many of its rivals. of retail.

Next’s online presence is its undeniable strength. Despite the fact that its nearly 500 stores were closed for a significant part of its year until January 2021, the group’s sales only declined by less than 17% and Next is confident that current profits are on the way. to return to pre-Covid levels of around £ 700 million in the current year.

Investors were well rewarded, with the group’s shares reaching an all-time high after revealing that online sales rose more than 60% from 2019, making it the UK’s largest internet clothing retailer. United, ahead of competitors like Asos and Boohoo. They were also rewarded with a special payment to the shareholder from their “excess” cash stack.

Next’s first half results are expected on Wednesday.

Learn more about Next (NXT)

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Anne G. Cash

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