Next, the UK’s second largest clothing retailer, has raised its profit forecast following strong Christmas sales.

Next, the UK’s second largest clothing retailer, has raised its profit forecast following strong Christmas sales. The company revealed that its sales over the fourth quarter were ‘significantly ahead of expectations’ and that its web-based operation, Next Directory, performed particularly well with sales up a staggering 21%

But why did Next perform so well when other retailers like M&S and Debenhams performed so poorly? Whilst a number of analysts have credited this success with the fact that Next ‘got its season spot-on’ - what does that really mean?

Well, let’s start with the basics: Next is fortunate to have a team of very talented people who are able to collect and analyse customer data and then use this information to determine exactly what works and what doesn’t, both in-store and online. As a result, Next is not only able to get hold of the right merchandise, but also manages to present it in a way that appeals to today’s fashion conscious, value-minded consumers.

Even more importantly, however, Next has managed to achieve all of these goals with admirable consistency, and without having to cut back on either quality or service. It is clearly a formula that works - a mix of skilled merchandising, the right team, a strong focus on quality and superior service. But don’t all of these character traits sound a little familiar? I may be wrong, but if Next continues in this vein, could we possibly have another John Lewis on our hands?

Like Next, John Lewis also reported strong trading over Christmas, with like-for-like sales up 6.9% from a year earlier. Sales at its stores rose 1.2% in the five weeks to 28 December, with online sales soaring almost 23%. Andy Street said that the company’s shops and online channel really worked hand in glove this year to give the customers exactly what they wanted - and that John Lewis managed to get their pricing right as well.

Unlike many other retailers, Next and John Lewis did not discount before Christmas. Instead, both relied upon a consistent approach and a compelling multi-channel offering that allowed them to win over Christmas shoppers with a heady mix of quality and value. As a result, pre-tax profits at Next are now expected to be up by as much as 12.6% to £700m, which means that it will beat Marks & Spencer for the first time in its history.

For years, Next has been regarded as well-run business that knows how to control costs, manage its stock, and use discounting skillfully - and all of these strengths will no doubt continue to pay dividends. However, Next will probably achieve the greatest success by forgetting about competitors like M&S and Debenhams and keeping its eye on John Lewis as a role model instead. For Next, imitation isn’t just the sincerest form of flattery - it is also a good way for the company to raise its game and increase its market share considerably.

  • Dan Coen, director, Zolfo Cooper