Three weeks ago we were in the midst of the media storm surrounding the poor results posted by Marks & Spencer within its general merchandising division (6.8% down in the three months to the end of June).
Comparisons, perhaps unfairly, were being drawn against Asos, which posted a 31% hike in first-quarter sales in the same week. I say unfairly, because comparing a mostly mid-market womenswear, bricks-and-mortar-heavy retailer with an online-only young fashion one is a bit like comparing apples and pears in the current climate.
More interesting to market observers will be this week’s Next results. These show a very strong first-half performance by Next with sales up 4.5% on last year in a business that most would argue offers a fairer direct comparison to M&S.
Indeed, Next is believed to have been quietly stealing market share on M&S for some time – although M&S boss Marc Bolland has been reluctant to be specific, saying it’s ‘not our style’ to comment. Next seems equally reluctant to discuss this, telling Drapers it is difficult to measure.
Vagueness aside, the key thing to look at is the structure of the two businesses, alongside their products.
M&S has come in for heavy criticism for being late to the online party with a website that even now could be seen as lacklustre. Next, in comparison, has built on the consumer loyalty for its catalogue business with a strong online offer and has grown ecommerce sales significantly.
M&S also came in for widespread criticism for trying to go too young with its offer and alienating its core middle-aged female customer base. Indeed, Bolland has appeared to be at loggerheads with his own head of clothing, Kate Bostock, for the past year or so. He ended almost two years of speculation by announcing her departure as the results landed.
Next has, meanwhile, continued very clearly to target the 35-plus female market above all others.
Its boss Lord Wolfson, universally acknowledged to be one of the sharpest knives in the fashion retail drawer, told Drapers he didn’t expect the Directory business (which includes online) to continue to grow at the same rate in a maturing UK market. He said big wins for the future will come from abroad and he is already planning a Chinese version of the Next website.
Wolfson inherited the catalogue business – giving him a head start on M&S – but he has also been visionary in how the Next business develops, and has never lost sight of the core customer or the clothing. He has on his team a certain Christos Angelides, known to some in the industry as a ‘clothes whisperer’, who has ensured that Next always has the right mix of basics and trend-led pieces to delight its core shopper.
It’s clear who is in the gold medal position in this race.