Next Plc

Main problems of the company?
The main problem in the next plc arrived in 2016-2017. During the first half year its profit before tax dropped down to 9.5% to £309.3 million and total sales dropped down to 2.2% to £1.9 billion.
Even though Next’s expectation was likely seen to be better, but the analysts said it is still in the danger due to less consumer spending which was hit because of the inflation and poor wage growth and fall in the value of pound.
Next was not ready to give the Christmas sales and discounts and hence the consumers couldn’t afford Next’s price during time of inflation. Substitute product which are available in the market with a cheaper cost, keeps the company in danger zone.
Also, the company rarely holds fashion shows

Next also runs various specialized warehouse differing in the size from 30,000sq.ft to more than 60,000sq.ft. Third party handles some of the distribution of the retail and Next Directory customers.
Business model:
Next business model is comprised of 5 things:
MODEL DESCRIPTION
Next Retail Clothing, footwear, accessories, home products. Around 60% of the sales are from Next Retail.
Next Directory Provide customer services and opportunities overseas with the help of internet i.e., online shopping. Has increased 150% of the sales.
Next international Retail Around 200 franchises store around the globe. It accounts of 2% of the sales
Next Sourcing Designs, sources and buys Next products. More than 40% of the group’s product were produced by next sourcing.
Lipsy Designs and sells. For young women Growth strategy:
1. To increase sales performance by enhancing and growing next product ranges.
2. Excessively increasing retail selling space. Before the investment is made, new store evaluation must be met by the need of financial criteria. Return on capital against appraised targets is the measurement key of success.
3. To increase the n umber of profitable next directory customers and their spending in the UK and through international online

UK is the hub of fashion where many fashion brands have made their remarkable place. It is assumed that the UK market will grow by 16.6% over the following 5 years to £51.2 billion. In the year 2017- 2022 is forecast to outperform total retail growth.
Clothing is said to be the third fastest growing industry in the UK after health & beauty and food & grocery. Consumer’s desire to look good in terms of appearance in clothing will grow according to the trends and hence the fashion industry will always grow during consumer’s willingness to pay.
The online clothing market is also increasing and has increased by 55.3% in the five years to 2022, accounting to 34.2% of the market.
Young shopping purchasers have higher buying frequency of clothing with 58.1% of 16-24s buying clothes at least once a month.
Fashion industry has employment of 555,000 in the UK. The retail sale of clothing is 414,000. Retail sale of footwear and leather goods is 59,000. Wholesale of clothing and footwear is 43,000. Manufacture of wearing apparel is 34,000 and the manufacture of footwear is