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Next adjusts buying cycle as profits soar

Next has adjusted its buying cycle, introducing more staggered drops as it looks to appeal to the consumer trend of shopping for fewer items more frequently.

The high street retailer, which last week revealed that full-year profits had increased 11.8% to £695.2m, has moved from a two-season buying cycle to a four-season cycle to increase the availability of cold weather clothing in January, February and March and warm weather clothing in August and September.

Next chief executive Simon Wolfson said: “In the last 20 years people have moved from doing a small number of big clothing shops and maybe travelling to a big high street like Oxford Street to now doing smaller shops more frequently and closer to the time that they need it.”

Consumers will see a greater difference in stock on the shop floor from spring into summer and from autumn into winter, he said.

Next last week announced that sales rose 5.4% to £3.74bn in the year to January 25, 2014. Sales across Next Directory, its online and catalogue business, grew 12.4% to £1.34bn as retail sales edged up 1.7% to £2.23bn.

Wolfson said new retail space and online sales growth had been key profit drivers during the year, as Next overtook Marks & Spencer’s profits for the first time. That gap is expected to grow wider for the current financial year, with Next’s pre-tax profit expected to be between £730m and £770m. M&S
profits are forecast to be £628m when it announces its results on May 20.

But Wolfson remained tight-lipped about plans for Next’s new standalone website Label, which will sell third-party brands including Warehouse, Oasis and Superdry. He emphasised that it was only a trial run for the site, which is similar to the retailer’s short-lived Brand Directory, but said now was a better time to attempt the move.

“We have got a much bigger stable of brands, when we tried it last time it was right at the beginning of our third-party business and we didn’t have critical mass. We’ve now got many more brands so maybe this time it will be right,” he said.

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