Next Plc achieved a 7.2 per cent lift in its overall sales to reach £4.3 billion for the year ending January 2015. Sales from its Next Directory division which encompasses web trading increase by 12 per cent to £1,540.6 million (£1,373.9 million in 2014) and store retail sales by 5 per cent to £2,348.2 million (£2,240.5 million in 2014) in a year which has seen many other retailers struggle. The business had opened new UK retail space during the period, adding 330,00 square feet whilst also closing some of its smaller, less profitable stores. It was also year of focus on improving customer service throughout the business.
Active Directory customers grew to 4.118 million with overseas online customers at 495,000 and cash with order customers (credit/debit card payers) up by 42 per cent overall. Whilst there was a decline in credit customers, this was not matched by a decline in credit sales. Interestingly the business has found that returns from its CWO customers are considerably lower than from its credit customers. That combined with lower marketing costs to attract CWO customers has narrowed the difference in profitability between credit and CWO customers to 2.4 per cent.
Fulfilment for German and French customers has been speeded with most now receiving next day delivery. This is being extended to other key territories in Europe. A new local hub in Northern Ireland was opened in September to allow next day delivery to be offered to all customers in Northern Ireland and Eire. Plans are now in place to open a similar hub in Russia followed by a contact centre there to reduce current delivery times from 8-12 days to between 2-5 days and generally improve service. A further distribution hub serving mainland China, Hong Kong, Taiwan and Japan is also planned, again with the goal of cutting delivery times. The business believes that China will quickly become on of its top ten trading territories. Next will continue to rely upon on franchise partners in some 37 countries for store representation. These partners currently operate 188 stores between them with Next itself only operating 13 of its own stores in Central Europe.
Elsewhere in the business both Lipsy and LABEL showed growth. In typical Wolfson style the business is forecasting modest growth in the current year.
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