The company, which was founded in 1894, is one of the few not experiencing the woes of the economic downturn hitting the rest of the country. In its interim results, new chief executive Simon Wolfson, former group sales and marketing director, proudly announced growth in all of the company’s trading sectors.
Next Retail and its online service Next directory, which together make up the Next brand, saw an increase in turnover of 19%, from £608.2m to £722.2m.
Finance director David Keens will be watching intently the company’s clothing sales, which accounts for the majority of its turnover. At Christmas, city analysts and investors were encouraged as the company announced a ‘bumper’ year in this crucial trading period.
Next announced sales for the 23 weeks to January 5 had increased by 21% on last year in its 251 stores and its online service.
Following the announcement, analysts upgraded their forecasts on the company, saying Next had not suffered from direct competitor Marks & Spencer’s new youthful branding pitch.
And, as it approaches its preliminary results, Next has received a new boost from analysts at Deutsche Bank, who put the stock on its ‘UK Focus List’.
Deutsche upgraded the company’s stock from ‘hold’ to ‘buy’, saying Next was one of the best managed retail companies in the UK. They said the stock was undervalued and concerns over the rejuvenation of Marks & Spencer were overdone.
The company is perhaps proving that ‘slow and steady wins the race’.
Although it has opened six new stores in the last year, it has not made any major acquisitions, deals or reinvented itself in any way, which is what normally drives the company’s stock.
Deutsche blamed the lack of news for the company’s undervalued share price. But its bottom-line growth of about 15% may prove to be the winning bet over many of its announcements-driven competitors.
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