Next is considering introducing branded fashion into its high street stores after sales slowed by 6% for the first half but rose by 2% at its mail order business.
Group finance director David Keens told Drapers that while branded sales in the Next Directory catalogue and its spin-off etail site Brand Directory made up just 1% of sales, branded merchandise offered the group a huge opportunity for growth.
He said: “We expect the branded market to become very important for Next going forward. There is definitely the opportunity to add more brands. At the moment, there isn’t the intention to put a significant amount of brands in stores, but it is something that we are looking at.”
Earlier this year, Next laun-ched Brand Directory, which stocks about 60 young fashion brands including Lipsy, Miss Sixty, Firetrap and 7 For All Mankind, in an attempt to keep pace with etailers such as Asos.
Keens admitted that after a strong start sales had slowed and the venture had not met expectations.
But Next has been quietly introducing branded merchandise into its Next Directory catalogue in recent months to capitalise on demand. Keens said: “We have about 40 brands in the Directory but there is the potential for a lot more.”
A source close to Next said: “Next sees an opportunity in the young branded sector, where the likes of USC and Original Shoe Co have struggled to survive on brands alone because of margin issues. Cost pressures mean the model only works now with a significant amount of own label alongside brands.
“Its male shopper is quite brand-oriented anyway and it would drive footfall.”
But another source warned that Next may find it hard to persuade brands to supply its shops. “It’s one thing to be on a low-profile website but another to be in hundreds of high streets across the UK. But you’re talking big orders which could be tempt-ing in this climate,” he said.
Next results for 26 weeks to July 26:
Group sales -1.8%
Retail sales -3.8%
Directory sales +2%
Full-price l-f-l sales -6%