- 03 October 2012
“Comfortably beating targets”: Next Home and Garden in Ipswich
Future expansion at Next will focus on the rollout of its successful new Home and Garden superstore format, the retailer said as it unveiled its results for the half year to July 2012. The fashion and homewares retailer made a better than expected start to the year, with group revenue up 4.8% to £1,640m and profit 10.2% ahead of last year, at £251m.
A decline in retail like-for-like sales cost the company £18m of profit, but the addition of new profitable space added £14m while growth in online sales added a further £26m, which, along with good cost control, more than offset the negative impact of the decline.
Next said it still sees good opportunities to increase UK retail selling space profitably, and that "there remain many towns and cities where we believe that we have the potential to offer wider ranges in larger stores".
It grew trading space by 89,000 sq ft in the first half, most of which came from moving or extending existing stores, but which also included the opening of the second Home and Garden store, in Ipswich in June, following the launch of the format in Shoreham, West Sussex, last year.
"Both Ipswich and Shoreham have so far proven successful and have comfortably beaten their targets," Next said.
Earlier this year the company revealed that it would be opening a third store in Warrington later this year, but this has since been delayed due to a fire and it will now open in February 2013.
Next said that the emphasis would now continue to be on these new stores, and added that they must make a store profit contribution of 15% and pay back net capital invested within 24 months.
"A further 17 similar sites have been identified and, depending on planning consents (by no means certain), could open over the next three to five years," it went on. "This represents around one third of the total expansion opportunities we have identified."
Next Home and Garden superstores combine a Next fashion offer with DIY products such as paint, power tools and tiles, homewares including carpets, blinds, flooring, taps and sinks, and a garden centre.