Next Plc
Essay by review • February 7, 2011 • Study Guide • 1,936 Words (8 Pages) • 1,965 Views
1. Introduction
In this assignment we have been set the task of carrying out a retail evaluation project of Next plc.
This has to be done from the point of view from a consultant or analyst.
The assignment has been split up into two tasks, firstly to analyse and evaluate Next plc, then secondly suggest any ways in which their marketing performance can be improved for future success.
My first step is to get an overview of Next plc as a company, how it started, the market sector it operates in and its past and present performance.
2. History of Next
To analyse Next we need to get a clear view of the business and start from the very beginning. So back in 1864 was the very beginning for the company we now know as Next. J. Hepworth and Son Tailors established a business in Leeds, then called GentlemanÐŽ¦s Tailors.
J. Hepworth shed its old identity therefore it no longer exists in the former guise. Since then it has grown immensely to the large company we know today.
1948 Chain stores were established and then 33 years later in 1981 J. Hepworth bought Kendall stores and established womenÐŽ¦s clothing stores. It was needed that he diversifies into womenÐŽ¦s wear. When this took place it was a large change, Next converted 70 stores in 6 weeks.
1982 George Davis joined the company in order to sell designer style clothing at High street prices. This is when the Next Womenswear chain was launched. Two years later in 1984 the menÐŽ¦s range was launched, followed by the range of household furnishing in 1985.
It wasnÐŽ¦t until 1987 when the Childrenswear was formed; another product range in the growing company of Next and this was followed by Next Directory in 1988. The Directory allowed them to target many customers and sell products without paying high street rents. Currently they are ranked number one among High Street names which are offering mail ordering clothing.
The company was well established and began to go global offering franchise opportunities around the world.
To date Next have over 400 stores in the UK and 100 franchise stores overseas. According to Data Monitor Next is the third largest clothing retailer in the UK.
Next operates in the sector of selling clothes, shoes, accessories and home furnishings. It worked out well as the actual name ÐŽ§NextÐŽÐ is a flexible name. It can be adapted to many different sectors, allowing them, as they already have, to diversify.
The business operates in five different segments, Next Retail, Next Directory, Next Franchise, Ventura (a financial service) and finally Next Asia. This stresses how large the company is on a global scale, a lot larger and more established than I had initially thought.
Next was a name that was chosen by John Stephenson. In those days most people named a shop after the name of the owner, but Next was named after an idea, meaning that ÐŽ§things happening not just today, but tomorrowÐŽÐ.
3. Past and Present Performance
3.1 The market
According to current statistics the UK clothing market is a declining market. Most companies in this clothing sector make only moderate profits, because of such fierce competition.
To expand the market share in this sector is not easy. It needs a lot of planning, knowledge and money.
In the clothing sector there are two main types, those who sell their own brands, such as Marks and Spencer and Next, then those who are larger department stores who sell other retailers brands, such as Debenhams. The clothing market is very diverse, it ranges from low cost to highly expensive designer wear, but it is in the middle level where the major brands are and money can be earned. Therefore I believe this is where Next is situated.
3.2 Past Performance
The past performance of Next can be seen as successful, it has grown from strength to strength. We can see from the following table it shows a snapshot of the situation of the company and that Next has nearly tripled their sales from 1994 ÐŽV 2000. Proving this is a success story for Next.
Next operates in the target market of 20-45 year olds. In the UK there are a total of 25.6 million homes across the UK, and within that 25.6 million 36% are in the age range of 20-45. Some companies have found it hard to satisfy this certain segment, but Next have managed it very well. Although suggestions are made that,
ÐŽ§Next missed its target marketÐŽKNext reaches a far wider age range than was originally plannedÐŽÐ - (McGoldrick)
Wither the target market was planned or not it can be said performance wise, Next are a success.
3.3 Present Performance
According to Financial Times on 16th September 2005 ÐŽV
ÐŽ§Next yesterday underlined how tough conditions are on the high street as it reported its worst trading figures in seven years. The fashion chain which has been one of the better performers in a difficult environment, says trading in the past 6 weeks has been worse than in the first six months.ÐŽÐ
ÐŽ§The downturn in trading was not entirely the result of the consumer environment, Next had not been getting new fashion trends into the stores quickly enough, consumers are adopting new trends faster and Next was not quick to respond as some of the competitorsÐŽÐ
So currently Next are having a few small problems due to the consumer environment and changing trends. But as it is a big company and finically strong the chief executive believes ÐŽ§itÐŽ¦s not going to break the companyÐŽKand we will still have growthÐŽÐ
In the financial statement of Next it was stated they had predicted 2005 to be a challenging year, but believed that they were clear about what needs to be done in order to continue in growth in sales and profits.
4. Observational Store Survey
4.1 Store image and layout
With the amount of intense competition in the market today creating the ÐŽ§rightÐŽÐ layout and environment is no longer
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