Commenting on the latest results from Next, Kris Wigfield, partner at Begbies Traynor in Sheffield, says:
“The high street brand continues to impress and demonstrate that established UK brands can still be successful in what has been a torrid time for retailers.
“The continuing success of its online and catalogue offering means the retailer has a significant advantage over its competitors, and continued investment in its online offering will guarantee future success. Interestingly, the brand has adopted a strategy of opening new stores in retail outlets rather than choosing traditional high street locations as can be seen by the recent opening of its store at St James place in Sheffield. This complements its presence at other retail outlets in Chesterfield and the Next Home in the Meadowhall retail outlet.
“However it is not all plain sailing for this iconic retailer, with it suffering from a double whammy of falling high street sales combined with higher staff wages which will continue to impact its financial performance. As such high street store closures are on the cards in the coming year.
“Next may have to change the way it reaps rewards from its remaining physical space. It has a track record of responding well to the market with successful results from investment in improving its online service, so it’s likely that it will look to take a reading of what its customers are searching for and react to it.
“This could mean improving the customer experience or devising a new layout for a store that is closer aligned with the online service, continuing its goal of creating a more seamless online-offline business. However, Next’s favourable relationship with its shareholders could give it the opportunity to try a more radical change to restore its high street space to former glory. Can it try something completely different that panders to and mirrors the behaviour of its online customers in real life? Either way, it has to find a way to continue growth, minimise store closures and deal with the continued threat of ASOS, Boohoo, economic uncertainty and reduced expendable income for consumers.”