Next Says Directory Profit Exceeds Shops For The First Time.....

Next said 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.

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.

In October, Next introduced free, next-day delivery to stores for customers who ordered before 10 pm the night before. This service is available at 341 stores representing three quarters of retail turnover. Orders made from home and delivered to store grew from 30 per cent to 45 per cent as a result.

The service will be extended to nearly all stores during this year. Next also said it plans to improve the reliability of deliveries to customers from current levels. Around 2 per cent of parcels fail to arrive on time at present.

Next chief executive Simon Wolfson explained in his review of the year's performance: 'However, whatever improvements we make, there will always be a small number of errors. How our staff handle these rare events is central to developing our reputation. A Company’s ability to rectify mistakes is, for many customers, the litmus test of great service. We can do much to respond better to these occasions through improved recruitment, staff training and systems.'

It also said it plans to bring new product injections in line with stores. Shops receive injections of new lines roughly every six weeks, with the year being divided into nine Retail phases, it said. Directory is organised around the publication of four big catalogues and has missed out on some of the newest retail stock.

From this year, stock will be added to the website to coincide with retail phases and supported by 'New-In' brochures in stores.

Last week Next also launched a new publication designed to compliment its Directory offer called Label - selling other clothing brands and trading from a catalogue and a website TheLabel.co.uk. It has already been distributed to 400,000 customers.

Total pretax profit at Next rose 11.8 per cent £695.2 million and total sales increased 5.4 per cent to £3.74 billion. The company has been lauded recently because it is has  exceeding profit made by Marks & Spencer.