Next to outline recovery plan

Fashion chain Next is to invest £17 million over the next three years to revive its existing stores and product offering. Another £10 million will be spent on marketing this year, in an effort to win back customers. The UK ‘s second largest clothing chain revealed plans for recovery while releasing its results for 2007. Group pre-tax profit rose 6.5 percent to £478 million on revenues up 5.7 percent to £3.3 billion. Despite solid revenues and profit gains, like-for-like retail sales were disappointing, down by 7.2 percent.

The fashion giant holds 6.6 percent of the British apparel market, but has seen sales wane. The company intends to improve its product offering by increasing its focus on newness, quality and desirability. The group emphasised that it needed a more emotional response to its product, rather than regarding it merely as a commodity. Next released a statement communicating what the brand stands for: “Exciting, beautifully designed, excellent quality clothing and home ware; presented in collections that reflect the aspirations and means of our customers.” It also plans to upgrade its marketing efforts, including in-store marketing from graphics through to internal displays. The group said it had spent over £2 million alone on replacing shop window mannequins.

Chief executive Simon Wolfson warned that the consumer environment would remain “challenging”. “While we are still cautious for the year ahead we do expect to make progress in stabilising Next Retail like-for-like sales,” he said, concluding, “Next remains highly cash generative and we will continue with our policy of buying back shares when it is earnings enhancing and in the interests of shareholders generally.”