Whatever the weather, Next sticks to its guns
Predicting the weather is notoriously fraught with difficulty, but predicting that retailers will blame the weather for bad performance is a sure thing.
Whether it’s too rainy, too snowy or even too sunny, high street operators are renowned for finding a way to pin their poor performance on something other than their own actions.
The Beast from the East has been cited by every retailer, and more than a handful of leisure groups, posting figures in recent weeks as the reason for their poor results.
Every retailer, that is, bar Next, which outperformed its own expectations, citing good – yes, good – weather as boosting sales.
Simon Wolfson and co. are famously cautious when it comes to forecasts, so it was no huge surprise that the business upgraded its full year profit guidance after better-than-expected first quarter results.
Next has more than halved its forecast for full year profits from a fall of 2.9 per cent to a more modest 1.3 per cent. No doubt that number will reduce further over time and could well end up in positive territory.
But even allowing for this, it’s clear that Next is walking a different path to so many others in the retail sector.
Executives at its closest competitor Marks & Spencer must gear up to trading updates with dread after the never-ending disappointment they bring. Earlier this week, the British Retail Consortium revealed that consumer spend had dropped at the sharpest rate since records began, just another piece of weak economic news that fed into the Bank of England’s decision to hold interest rates.
Although Next has had its share of wobbles in the last few years, by and large the story has been one of consistency – both in strategy and in results – and quality.
This quarter, when so many rivals have struggled with consumers being snowed in, underscored Next’s online performance.
It also shows just how weak the footfall argument is becoming: shoppers, particularly when they are bored, will buy clothing online just as readily if they like what they see.
This is no one-off or weather-related blip. Next’s steady-as-she-goes trading is borne out of sticking to its guns on discounting – just two big sales each year, knowing its shopper and not scaring her off by lurching from mumsy blouses and elasticated trousers one season to fashion-forward statement pieces the next.
It might not make the fashion pages, but theirs is a story worth following.