But this is more than just a simple tale of the web site and Directory having a strong Christmas at the expense of the high street. Look back to last Christmas and the story was exactly the same, with retail like-for-likes falling, but Directory increasing. Next is being squeezed by mid-market rivals that are offering more fashionable products at better prices in appealing stores, not least Marks & Spencer.
Something has gone badly wrong in the stores and there is no surer sign than the usually guarded chief executive Simon Wolfson's candid remarks yesterday. He told Retail Week that the business had been off the fashion pace and slow to adopt trends in stores. He also revealed plans for yet another trial shopfit.
He is right to do so, because Next's stores have become pretty dull places these days and even the high-profile, new-look stores in Manchester and Oxford Street have failed to hit the spot. Contrast this with Next's Directory, which looks sophisticated and stylish and you could almost be looking at two different businesses.
Next is still a very well-run company, as evidenced by Wolfson's ability to exceed profit forecasts, despite slowing sales. It has been a genuine pioneer of multichannel retailing within the fashion sector.
But stores remain the frontline of retailing and Next's stores need to improve, particularly given the pace at which the company is acquiring space. If the like-for-likes continue to plummet, more serious questions will begin to be asked.
No comments yet