How Next, which was founded in Leeds, became one of the most reliable forces in retail

Next is set to unveil a rise in sales for the past half year but shareholders will be waiting to find out if the poor summer weather has dampened the strong momentum built up by the fashion giant.

Sunday, 26th September 2021, 2:50 pm
Updated Sunday, 26th September 2021, 2:52 pm
Next is set to unveil a rise in sales for the past half year but shareholders will be waiting to find out if the poor summer weather has dampened the strong momentum built up by the fashion giant.

The high street stalwart has continued to be one of the most reliable forces in retail, despite the heavy impact of the pandemic on footfall, with the group receiving a boost from its strong online operation.

In July, chief executive Lord Simon Wolfson struck an upbeat tone as the retailer delivered a profit upgrade.

It is expected to unveil strong sales growth for the six months to July when it updates the market on Wednesday.

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Lord Wolfson told shareholders in July that sales for the first 11 weeks of the second quarter had smashed expectations, with figures 18.6% above the same period in 2019.

Previous guidance had suggested the firm could post 3% growth.

The company also unveiled its second profit upgrade in two months, revealing it was on track for pre-tax profit of £750 million for the current year.

Shareholders will be expecting another robust set of figures, although poor weather over much of July and August could have thwarted another potential upgrade.

HSBC analyst Paul Rossington said a “modest slowdown” in sales growth was expected for the third quarter as pent-up demand subsided and the weather restricted the recovery in footfall.

Sophie Lund-Yates, equity analyst at Hargreaves Lansdown, said: “Second-quarter sales far outpaced the first, largely because of pent-up demand and warm weather.

“What we’d like to know is at what pace this is slowing down. As the warm weather eased, so did sales, so exactly what this will translate to is yet to be seen.”

The update comes a fortnight after Next agreed a deal to run Gap’s business in the UK and Ireland.

The move will not lead to a return for Gap’s high street operation, after the retail giant revealed plans in July to axe its 81 stores in the region.

The deal will mean the two firms form a joint venture – with 51% owned by Next and 49% by Gap – which will see Next operate the US fashion brand’s digital operations, concessions and click- and-collect service.

New York-listed Gap Inc will continue to produce clothing ranges for the brand but the deal will see Next take over the day-to-day operations of Gap in the UK and Ireland.

It comes shortly after Gap said it would leave the UK high street for good as part of a shake-up designed to help the group return to sustainable growth.

Next will use its Total Platform online, distribution and logistics system to run operations for the brand.

Mark Breitbard, chief executive officer and president of Gap Global, said: “Gap is partnering with Next, one of the UK’s leading online clothing retailers, to amplify our omni-channel business and meet our customers in UK and Ireland where they are shopping now.”

Lord Wolfson said: “Next is delighted at the prospect of its Total Platform supporting Gap on the next stage of development of their world-renowned brand in the UK and Ireland.”

Next can trace its history back to 1864 when J Hepworth & Son, gentleman’s tailors, was established in Leeds.

In 1981, Hepworth bought the chain of Kendalls rainwear shops to develop a womenswear group of stores called Next. Next for Men launched in August 1984. By December 1984 there were 52 menswear stores.

By 1994, Next had opened its 300th store. The brand was now trading in 16 countries worldwide. Next was the Official Clothing and Homeware Supplier to the London 2012 Olympic Games and Paralympic Games. By 2013, Next was trading online in more than 70 countries.