Record profits as Leicestershire-based retailer Next bucks trend
Hundreds of staff at Next are to share a multi million-pound bonus as the fashion chain racks up its highest profits in its 30-year history.
The Enderby group will make a surplus of between £611 million and £625 million this year, bosses revealed yesterday.
The success marks the fourth consecutive year of record profits for Next, as many major high street names struggle to stay afloat amid tough economic conditions.
The group, which employs 3,500 people in Leicestershire, reported robust sales in the run-up to Christmas, mainly thanks to healthy online trading. As a result, Next said profits in the year to the end of this month were expected to rise by between 5.6 per cent and 7.9 per cent, compared to the previous 12 months, when the profit was £579million.
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Jane Viccars, senior lecturer in marketing at De Montfort University, Leicester, said: "It's an incredible performance. This is a business which has combined a physical high street presence and online operation very, very well."
Ms Viccars put Next's success down to cost-cutting, which includes ensuring it does not have too much of any one line to keep waste to a minimum, having a wide range of attractive products, continued expansion, good advertising and a well-run online division. Sales at Next stores rose 0.8 per cent between November 1 and Christmas Eve compared with the same period in 2011.
Online trading was up 11.2 per cent over the same period, which meant total sales increased by 3.9 per cent.
Chief executive Lord Simon Wolfson said further record profits were expected next year, despite the continuing gloom on the high street.
Lord Wolfson said the group, which has more than 530 UK stores, would continue to grow its online business, which accounts for about a third of total sales, and open 17 more superstores, which combine fashion, homeware, DIY and gardening products under one roof.
Speaking about this year's performance, he said: "It's likely to mean Next will pay a bonus to Leicestershire staff and it will total millions of pounds."
Lord Wolfson had further good news, announcing the creation of a £2 million creche at Next's head office in Desford Road, Enderby, creating about 40 jobs.
Martin Traynor, chief executive of Leicestershire Chamber of Commerce, said: "Retailers are under pressure, but innovative companies such as Next have responded to the recession well.
"Clearly, the fact they offer a bonus scheme to their employees does help the performance of the business."
Next's success comes after John Lewis announced earlier this week that sales in the seven days to December 15 rose 11.1 per cent on the same period in 2011. Sales at the department store chain's Leicester store were up 3.4 per cent.