Next plc designs, manufactures, and distributes clothing and home furnishing and accessory items to nearly 330 Next retail stores and through the company's Next Directory mail order sales catalog. Almost all of Next company-owned stores are located in England and Ireland. After ending a brief international expansion--in 1999 the company closed its seven company-owned foreign stores, including its five U.S. retail stores--Next has shifted its international strategy to brand expansion focused on franchising. Next operates franchises in some 20 international markets, especially in the Middle Eastern and Far East Asian markets. The difficult economic climate in the Asian markets in the late 1990s has curtailed the Next franchise expansion, however; after building to 43 franchised locations by 1998, the company entered 1999 with just 35 franchise stores.
At home, Next operations are divided into two complementary activities: retail stores and catalog sales. At the beginning of 1999, the company operated nearly 330 Next retail stores throughout England and Ireland, with total retail sales space of some 1.35 million square feet. Average store size is 3,500 square feet. Next, however, has been phasing out or extending its smaller stores--some of which are as small as 500 square feet--in favor of a larger multidepartment store concept with an average selling space of 14,000 square feet. Next retail operations provided more than £821 million of the company's total sales in 1998, while representing more than two-thirds of operating profits.
Once a separate division of the company with its own product offering, the Next Directory catalog sales operations have been dovetailed with those of its retail stores activities so that, in the late 1990s, the two divisions offer the same product lines under the company's "One Brand--Two Methods of Shopping" strategy. Next Directory offers a shop-at-home concept with fast delivery turnaround times of as little as one-day delivery. The hardbound catalog, which in ten years of existence has become something of a British shopping mainstay, is delivered to nearly 900,000 active customers, providing nearly £270 million of the company's 1998 total sales.
Next pursues a strategy of selling almost exclusively company-designed clothing, accessories, and other merchandise under the Next and other brand names. In this way, the Next product offerings of womenswear, menswear, childrenswear, and home furnishings are available only through the Next retail and catalog channels. Targeted at an age range between 20 and 46, with a focus on the 25--35 age group, the Next product range features high-quality, contemporary but not trendy styling, priced at levels affordable to the company's targeted middle-class market. The company employs its own design staff to keep an eye on seasonal trends and to create each year's clothing offerings accordingly.
Manufacturing is done primarily on a contractor basis, guided in part by the company's Hong Kong office. Next also operates several specialized warehouses ranging in size from 300,000 square feet to more than 600,000 square feet. Distribution to retail stores and to some Next Directory customers is handled by third party operators.
In addition to its retail store and catalog sales operations, Next offers financial services, particularly Next brand credit financing. Another growing division of the company is its Club 24 customer service subsidiary, which, under the Ventura name, operates call centers providing customer service and other services. Ventura's participation in the company topped £100 million in 1998.
Next Plc has been guided by chief executive officer David Jones since 1988. The company trades on the London Stock Exchange.
From Tailor to Trendy in the 1980s
By the time of Next plc's formation in 1981, the company had already been clothing England for more than a century. The company's origins were with the operations of J. Hepworth & Son,...
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