Investigating how businesses work - NEXT.

University Degree Business and Administrative studies

Introduction

I have chosen “NEXT” which is a Private Limited Company. A clothing retail store is selling fashionable goods such as menswear, womenswear, childrenswear and also have a home department which sells beds etc. They compete with other shops such as Marks & Spencer’s, Debenhams, British Home Store, Allders, River Island, Zara and FCUK. They also provide a mail order service.

They are located nationally and internationally. The branch I’m investigating is located in Valley Park Retail Stores in Purley Way.

Brief history

The first NEXT store opened in February 1982 with an exclusive co-ordinated collection of stylish clothes, shoes and accessories for women. Collections for men, children and everything for the well dressed home followed. Today NEXT trades from over 330 stores in the UK, Europe and 49 stores overseas. Over the last 18 months several larger format stores have opened in the UK, including Bluewater Park, Middlesbrough, Bromley, Norwich, Belfast and Liverpool. We opened their largest store in Cardiff in July 2002. The ground-breaking NEXT Directory launched in 1988 with 350 pages. The new larger format book this Spring Summer now has 833 pages. Online shopping was introduced in 1999 and now the entire book is available to shop from on the internet, page by page - a first in Home Shopping in the UK.

Mission statement

“The product is the success. It’s the result of their commitment to customers, suppliers, stores and each other. In order to build on their reputation and strengthen the company, we recognise the importance and value of their people. We realise that only by recruiting and developing high calibre people will their growth and strength continue.”

Financial statistics

In the year ended January 2003 NEXT Group turnover was £2,202.6m, 18% ahead of the previous year. Sales in NEXT Retail were up by 16%. NEXT Directory had a particularly good year with sales up 30%.

The year consisted of 53 weeks for NEXT Retail and Directory, compared with 52 weeks last year. This accounts for 1.6% of Retail sales growth and 2.7% of Directory sales growth. On a comparable basis Retail like-for-like sales increased by 3.3%. The NEXT Brand profit will have benefited by approximately £5m as a result of the extra week this year.
The operating profit before interest and taxation increased by 17%. The share buyback programme had two significant effects on our profit and loss account:

An increased interest charge meant that profits after tax increased by 11%.
Earnings per share grew by 18% (ahead of the increase in operating profit despite an increased tax charge) due to the reduced number of shares in issue.

Profit and Turnover

Turnover and profit figures are set out in the table below.

Profit Turnover

Before Tax Excluding VAT

2003 2002 2003 2002

£m £m £m £m

NEXT Retail 1,579.7 1,359.7 213.9 188.2