Wolfson’s winter jumpers keep Next hot as M&S plays catch-up

Elizabeth Fournier
MY mum used to buy me a jumper from M&S for Christmas every year. Now she goes to Next.” My colleague’s admission may have raised a laugh yesterday, but it’s a telling sign of the changing times on the UK high street.

Looking at Next’s upbeat statement – predicting a £15m increase in profit for the full year, at the lower end of expectations – it’s clear the retailer is impressing more than just the nation’s mums. Analysts may have expressed a “brief pang of disappointment” that Directory sales didn’t grow as much as hoped, but Lord (Simon) Wolfson’s brand was one of the first true multichannel retailers, and remains the most successful. The fact you can order something online at 9pm and have it delivered the next day was already pioneering – that it’s recently been extended to 10pm is remarkable.

Yesterday’s results will pile yet more pressure on rival M&S, forecast to post a 13 per cent fall in half-year profits next week. With Christmas just around the corner, chief executive Marc Bolland will need to do more to bring the mums back into the fold.

Shareholders in Pearson might wonder why the education group is so keen to reject a possible £1bn bid approach for the group’s books division Penguin from Rupert Murdoch’s News Corporation. Some may wonder whether the cash now – and there is talk Murdoch might be prepared to go up to 10 per cent higher – might not be preferable to a stake in a joint venture publishing group in which the German publisher Bertelsmann ends up with a 53 per cent majority stake.

Pearson’s outgoing chief executive Marjorie Scardino might be saying the merger will “greatly enhance Penguin’s fortunes and opportunities” but the reality is that in time it will be subsumed into the Bertelsmann group. Which is fine in itself, but why not conduct a proper auction between Bertelsmann, News Corp and any other interested buyers rather than go for this half-hearted approach to disposing of a trophy asset?