Next’s shift from seasonal to on-demand retail seems to be paying dividends.
Fashion retailers have been obsessed with the weather since Noah was a lad because of the big impact it has on sales.
Heatwaves and snowstorms alike have helped or hindered sales by appearing in or out of season.
But many apparel retailers remain wedded to the annual spring/summer and autumn/winter schedule, no matter what the weather may actually be like.
Fashion giant Next is shifting away from that way of doing things because it fails to recognise how consumers increasingly buy when they need something.
Next is moving from a two- to four-season buying cycle. There will be greater availability of cold weather clothing in January, February and March and of warm-weather gear in August and September.
If it sounds an obvious thing to do, no doubt it is. But it is testament to Next’s consummate strategic execution, which has made it a consistent star performer in fashion retail.
Whether it’s the profitable addition of new space, skilful management of multichannel, or making changes to buying seasons, Next’s retail disciplines have set it apart from rivals.
Such disciplines have enabled Next to deliver on its one, simple financial objective “to deliver long-term, sustainable growth in earnings per share”.
Last week Next posted full-year profits of £695.2m, which is expected to be ahead of M&S’s for the comparable year for the first time.
Next may not be able to control the weather, but it controls what it can and that is reflected in earnings.
B&Q looks for partner in China
Kingfisher is on the lookout for a partner to build its B&Q business in China into a profitable venture.
B&Q has been in China for 15 years, but has struggled to make a profit there. Although expansion into emerging markets might be tempting, the road to success can be long.
China should not be allowed to become a distraction from the main businesses, so a partnership would make sense.