Next has said international tastes in fashion are “converging” as tech platforms expose consumers to international trends, boosting the retailer’s overseas sales and helping it close in on £1 billion in annual profits for the first time.
The fashion and homeware retailer forecast its annual profits at £15 million more than previously expected, at £995 million — up from the £918 million recorded in 2023 — after overseas sales rose by 23 percent in the six months to July, offsetting a near 1 percent decline in sales of Next-branded clothing in the UK.
The company said that the “global reach” of tech platforms including Netflix, YouTube and TikTok were “exposing people to international fashion trends in a way they never have been before”, and improving international delivery networks were also encouraging “consumers to try clothes from other countries, and retailers to adapt their ranges that cater for overseas tastes”.
“It appears that international tastes in clothing are converging more rapidly. This convergence is not uniform and is more pronounced in some territories than others,” the retailer said, adding that there remains a “marked difference between different cultures and climates”.
Simon Wolfson, the chief executive of Next, said the business was “at the start of a new phase” with more than half of its sales and profits now online and rapid growth in sales of non-Next brands, some of which the group now owns.
Non-Next brands now account for 17 percent of overseas sales and the group said it had been experimenting with expanding wholly owned labels including Cath Kidston, after it bought the brand name out of administration last year, and Love & Roses.
The group has signed a partnership deal in India with the local operator Myntra to develop online and retail stores and will expand a deal with the US department store chain Nordstrom, where it is now selling childrenswear, and also expects to find similar partners in Japan, China and Australia.
Next also plans to improve the way it works with shipment hubs in the Middle East and Europe to help better serve shoppers in those territories.
The plans were announced as Next revealed that full-price sales rose by 4.4 percent in the six-month period, boosting total group sales by 8 percent and pre-tax profit by 7.2 percent to £452 million.
Next said that full price sales over the six weeks after that period had “materially exceeded our expectations” and were up by 6.9 percent as better weather helped boost trade.
Sales in the second half of the year are now expected to rise by 3.7 percent, up from 2.5 percent.
If Next were to hit £1 billion of profits for the first time, it would join only a handful of UK retailers that have done so, including Tesco — and Marks & Spencer in a previous era. The upgrade to its profit expectations lifted Next’s shares by 5.5 percent to an all-time high of £109.10 in early trading.
By Sarah Butler
Learn more:
Next Raises Guidance as British Retailer’s Sales Soar Abroad
The company’s increased its pre-tax profit forecast for the year to $1.3 billion.
