Next Boss Gives Promising Update for Shoppers as Profits Rise
THE boss of Next says the retailer has been in its best position for seven years – and the omens are good for British shoppers too.
As well as profits rising, CEO Lord Wolfson said wages are now rising above inflation, which would be good news for the economy and the high street.
He also assured customers that prices would not rise, that there were no plans for store closures and indicated that inflation was falling across the board.
“It’s been a long time since we started a year in a more positive frame of mind,” said Lord Wolfson.
“This year is not without risks, but it is nothing like the guaranteed headwinds of the past seven years.”
The number of Next customers who default on credit purchases has also remained the same over the past four years.
Lord Wolfson said this suggested the British had been better at managing debt than any city bank had predicted.
The company saw a bigger-than-expected rise in pre-tax profits of 5 percent to £918 million, while revenues rose 9.1 percent to £5.9 billion.
Shares rose 568p, or 6.6 per cent, to a record high of £90.78 yesterday.
The company’s valuation of £11.54 billion means it is now worth more than double that of rival Marks & Spencer – despite the latter’s recent revival.
And its success is at odds with the work of failed retailers including BHS, Topshop, Debenhams, Dorothy Perkins of Oasis and Warehouse – who failed to keep pace with changing consumer tastes.
Next has used its advantage as a catalog retailer – with warehouses and websites – to boost online sales, and the company is targeting further growth, with £216 million in technology investment this year alone.
It is also building a new warehouse that could add a third of additional online capacity.
Brands bought by Next, including Fatface, Cath Kidston and Reiss, have expanded their portfolio choices to consumers.
It also plans to expand further internationally.
Next now makes 25 percent of its online revenue from sales of other brands – prompting Lord Wolfson to admit it has been operating ‘like a department store online’ for years.
NO BAN BEN & JERRY
UNILEVER’s plans to spin off its ice cream division may face a brain freeze as the Ben & Jerry’s board has defiantly pledged to continue its political activism.
Ben & Jerry’s – founded by Ben Cohen and Jerry Greenfield – is known for its progressive message, with its ‘Save Our Swirled Now’ flavor tubs promoting action on climate change.
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However, the country has been criticized for wading into global politics, demanding a ceasefire in Gaza, refusing to sell ice cream in the West Bank and accusing President Biden of “fanning the flames of war” in Ukraine .
Ben & Jerry’s has an independent board of directors as part of its 2000 takeover of Unilever, but Unilever now wants to take Ben & Jerry’s as well as its Walls, Magnum and Cornetto brands public.
The board said yesterday that it has “ensured that Ben & Jerry’s continues to be at the forefront of a variety of social issues… Unilever’s intention to create a standalone ice cream company does not change the terms of the merger agreement.”
NO VIRGIN VOICE
NATIONWIDE has said it will not give members a vote on its £2.9 billion takeover of Virgin Money.
Instead, the partnership to create Britain’s second-largest mortgage and savings provider will go ahead if three-quarters of Virgin Money’s investors vote in favor.
Former Pensions Minister Baroness Altmann has joined calls for Nationwide to give members voting rights.
She said: “The whole beauty of a mutual society is that it is run in the interests of its members, who also have the right to vote.”
GAMES WORKSHOP, the maker of fantasy figures and table games, has increased its dividend to 105p per share after reassuring investors that trading exceeded expectations.
The £3.39 billion company is to turn its Warhammer 40k franchise into a TV series.
£100 million LINE CUTTING
DIRECT LINE’s new boss has unveiled a £100m cost-cutting plan as he defends the insurer’s independence.
The company earlier this month turned down a £3.1 billion takeover attempt from Belgian rival Ageas.
Now Adam Winslow, who took over a few weeks ago, insists the company, which also owns Churchill, has “turned a corner”.
He did not rule out job cuts, but said the savings would come from tight marketing budgets and the use of technology.
The company made a profit of £277 million, after a loss of £302 million.
WAITROSE JOBS AX threatens
WAITROSE is putting more than 500 jobs at risk – just a week after the retailer warned more cuts were on the way.
The upscale grocer is to close a delivery warehouse in Enfield, north London, which opened just four years ago.
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A spokesperson said: “With rental costs at Enfield increasing, we are considering closing the site.”
During lockdown, supermarkets rushed to open more warehouses amid an online shopping boom.
But as shoppers return to stores in droves, grocers are cutting costs.
Amid reports that the John Lewis Partnership could cut 11,000 jobs over the next five years, chairman Dame Sharon White has refused to impose a target on the workforce.
Last week she said there will be “less need for some roles in some areas in the coming years”.
The employee-owned retailer has denied its staff another bonus this year.
BIG APPLE lawsuit
APPLE has been hit with a US lawsuit accusing it of undermining competition by making third-party products work worse on its devices.
The US Department of Justice says Apple “suppresses innovation, harms producers and workers, and increases costs for consumers.”
Apple has said the lawsuit is “false on the facts and the law” – but shares in the iPhone maker still fell more than 3.5 percent yesterday.