News Column

Next step Soaring profits see rival M&S left behind

July 30, 2014

Julia Kollewe

Next has entrenched its dominance over rival Marks & Spencer with booming sales and a big increase in its annual profit guidance.

The clothing chain raised its profit forecast for the third time since March, from pounds 750m-pounds 790m to pounds 775m-pounds 815m, in the latest sign that shoppers are out spending again.

Its high street sales rose by 6.4% in the three months to 26 July, with directory catalogue and online sales surging 18.8% over the same period. Next continues to take market share from rivals after expanding into homewares and revamping its clothing ranges. The warm weather has boosted sales of summer clothes and swimwear.

The retail chain's chief executive, Lord Wolfson, said: "You're allowed to talk about the weather when things are good. We have had a really nice warm summer which has definitely helped sales of seasonal stock."

Next, long regarded as a "little sister" to M&S, caused a stir when its stock-market value overtook its rival two years ago despite having far fewer stores and total sales. Today Next has a market value of about pounds 10bn against its rival's pounds 7.1bn. This year Next leapfrogged M&S with annual profits of pounds 695m, and looks to have widened its lead.

Next has more than 500 stores in Britain and Ireland and a further 200 overseas, while M&S has nearly 800 UK stores and 455 abroad. M&S remains Britain's biggest clothing retailer by total sales, but those have been falling for 12 quarters in a row as it struggles to attract younger shoppers.

Next recently lost product director Christos Angelides to US fashion chain Abercrombie & Fitch and its finance director David Keens, who decided to retire after 23 years in the post. Angelides' responsibilities are expected to be split between different people. Photograph: Next

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Source: Guardian (UK)

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