Next to adopt “slightly more adventurous” styles as it gears up for changes in consumer behaviour

0 37

Next PLC (LON:NXT) is gearing up for changes in consumer behaviour after the pandemic’s disruption of the retail industry.


Chief executive Simon Wolfson told journalists the company is looking to be “slightly more adventurous” in the styles it adopts and potentially “push prices up a bit” towards their upper end.


READ: Next tumbles to loss but says online shopping habits are sticking


However, the new products coming up this winter have yet to see radical changes compared to 2019.


“I don’t think people will walk into Next and see a completely different Next and be shocked by it, but I hope they will be happier with what they see,” Wolfson said in a press call.


Looking at the short-term, Wolfson admitted the partywear lines may take a hit this Christmas but noted that the autumn/winter occasionwear business is usually smaller than the spring/summer.


In fact, he expects demand for winter products to be largely unaffected as people will still want to snuggle in cosy jumpers regardless of potential lockdowns.


And because those potential lockdowns should not be as restrictive as seen in March, the fashion powerhouse is not concerned about low customer confidence hitting trading.


More damage would come from prolonged local lockdowns and a “huge” increase in COVID-19 cases, Wolfson noted.


What’s in store for the portfolio


The pandemic has not inspired a change in modelling the store portfolio despite customers have been favouring retail parks compared to city centre locations.


While industry analysis has shown that consumers preferred the out-of-town stores for the higher chance of social distancing, in the case of Next they were also the most used for online collections.


“It’s not a surprise to us that those stores have done better during the pandemic and may do better going forward,” Wolfson stated.


“That said, I wouldn’t rush to write off city centres.”


The move towards larger retail parks may happen organically over the next ten years and be based on the changes in rental costs.


Next wouldn’t renew a city centre contract on “any terms”, but the shape of the portfolio will depend on what landlords are prepared to accept as rent, with changes considered on a case by case basis.


Earlier on Thursday, the chain posted a GBP16.5mln loss before tax for the half-year but raised its full-year profit guidance on the back of strong online sales even after shops reopened.


Shares were trading 4% higher at 6,402p on Thursday afternoon.

Leave A Reply

Your email address will not be published.