Logistics

Research limitations/Implications Due to a limited word count the report was limited to a very concise overview of the issue in question. Originality/Value Due to a lack of exclusive findings and the limited word count the report is easily reconstructed. The author however hopes to have offered a conclusive summery of the topic. Company Evaluation The Next Group is, after Marks and Spencer, the second largest high street clothing retailer in the British market. It is however the most successful multi-channel retailer encompassing a large scale high street retailer with international ventures, a directory business as well as an e-commerce side. Founded in 1864 as a gentleman’s tailor the brand Next was created in the 1980s. Only four years later Next Directory is established and the company is one of the first to make the move into e-commerce in 1999 (mintel.co.uk, 2008). Financial Overview At the moment Next is struggling to remain in the same strong position it has kept since the 1990s. Retail sales for the first half of 2008 are down on the previous year, profits before tax have dropped by 12.4% to £173.5 million, like for like sales have fallen by 6% (drapersonline.com, 2008) whereas the usually strong Directory increased its market share by 2.2% (next.co.uk, 2008). Raising the overall price point in order to move the brand towards a more aspirational market section goes in hand with the trend for consumers to trade up when choosing clothing for personal use (mintel.co.uk, 2008). The company has denied that this is a move to cover rising production costs and falling sales volumes but puts the pricing strategy down to a value added approach (mintel.co.uk, 2008). It is however questionable whether Next’s brand offering matches the needs of the target market to justify the higher prices. Outlet portfolio The company has moved much of its outlet space into large out of town retail parks. The stores in these locations tend to be too big to be taken up by a single brand offer and a definite need for further clearer sub-branding the merchandise becomes apparent (mintel.co.uk, 2008). This lack of choice compared to average high street shopping experiences has made consumers less likely to drive out of town when shopping for fashion (mintel.co.uk, 2008). Next however continues with its plan to open further stores and sales area already has nearly doubled over the last 5 years, sales however have fallen by 11% per store and annually by 35% per square meter (mintel.co.uk, 2008). An extensive refurbishment program is currently being rolled out nation wide costing 40 million in the last year alone (drapersonline.com, 2008). Merchandising Merchandise is targeted at ABC1 consumers between the age of 25 and 45 although research shows that this extends to shoppers even over the age of 50 (mintel.co.uk, 2008). Aiming at a large percentage of the market the product design is influenced by current trends with an emphasis on wearability and quality. This careful approach to positioning is a weak point in the company’s strategy leaving the products without a distinctive trademark to justify the slightly higher average price point. Womenswear is designed with the season’s key trend in mind without sacrificing wearability and comfort. Main colours and print ideas are taken into account although some major trends are occasionally missed out on. Menswear is divided into casual- and formalwear. While casualwear is mostly designed to appeal to a broad market there are definite influences from more current trends especially in denim and t-shirts. Formalwear offers one of the high street’s most diverse offer in terms of quality and pricing, ranging from ranging from an affordable £100 to £220 per suit (mintel.co.uk, 2008). Childrenswear is based on similar principles focusing on a broad appeal and comfort. Directory and E-commerce Launched in 1988 Directory has been a successful home shopping fascia since it’s beginning. At some point in the recent future it generated about a fifth of the companies overall profits (mintel.co.uk, 2007). One of the possible reasons for this strong performance is the lack of store atmosphere in many of Nexts retail outlets compared to those of many of the retailer’s competitors (mintel.co.uk, 2007). The home shopping catalogue offers not only the products under the Next brand from clothing to home but also a variety of external brands. Although even the Directory has been feeling the pressure of the current economic climate it can still be considered to be a success story of the British fashion industry. On top of that, Next was one of the first British retailers to include an interactive website as an additional outlet fascia. Generating up to 45% of the Directory’s sales it is a growing business arm (mintel.co.uk, 2007). This is despite the common critique that the website’s layout could benefit from a redesign in order to look less like the pages taken straight out of the catalogue.