The company charges an annual percentage rate of 25.99 per cent to its 2.8 million customer which it classes as 'credit customers'. The figures have all been extracted from the company's annual profit statement released last week.
Next said it has 3.7 million Directory customers in total. The Sunday Telegraph said today that the charges are 'fuelling an 18 per cent increase in Next Directory profits'.
Next said last week that the profit made by its online and catalogue business has exceeded that made by its shops for the first time ever.
Operating profit at Next Directory, which sells online via Next.co.uk and through its clothing and home catalogue, increased by 18.7 per cent to £358.5 million in the year to January. That compared to profit at its 541 shops which increased 5 per cent to £347.7 million.
Next was widely praised last week for overtaking Marks & Spencer on a profit basis. Marks & Spencer is expected to make £615 million pretax profit in the year to the end of March compared to Next's £695 million.
Next was widely praised last week for overtaking Marks & Spencer on a profit basis. Marks & Spencer is expected to make £615 million pretax profit in the year to the end of March compared to Next's £695 million.
Directory sales increased 11.4 per cent to £1.34 billion compared to a rise of 1.7 per cent at the shops business to £2.23 billion.
Comment: The tone of the Sunday Telegraph article suggests that there is something untoward about the credit charges. However, its charges are only marginally higher than the 14-19 per cent APR offered by most bank credit cards and lower than some bank cards and others such as Capital One. They're also much lower than most of its rivals - Very.co.uk charges 39.7 per cent, for example.
Debenhams store card charges up to 29.9 per cent per annum and House of Fraser's Recognition card charges up to 24.9 per cent.
Even ignoring the money made from the charges, the Directory is still making an operating profit of more than £200 million on sales of £1.34 billion. Most other retailers - online or offline - would be deeply envious of that level of profitability in this digital age.
Comment: The tone of the Sunday Telegraph article suggests that there is something untoward about the credit charges. However, its charges are only marginally higher than the 14-19 per cent APR offered by most bank credit cards and lower than some bank cards and others such as Capital One. They're also much lower than most of its rivals - Very.co.uk charges 39.7 per cent, for example.
Debenhams store card charges up to 29.9 per cent per annum and House of Fraser's Recognition card charges up to 24.9 per cent.
Even ignoring the money made from the charges, the Directory is still making an operating profit of more than £200 million on sales of £1.34 billion. Most other retailers - online or offline - would be deeply envious of that level of profitability in this digital age.
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