Rolling coverage of the latest economic and financial news
- Next: Profits halve last year as pandemic forced store closures
- But retailer lifts profit guidance this year by £30m
- Wolfson: Four main reasons for Next’s resilience
- Yesterday, Deliveroo shares slumped 26% in IPO shocker
Wolfson also points out that Next was fortunate in one other respect: The product areas that did well have much lower returns rates than those that underperformed.
For example, customers traditionally order several dresses with the intention of only keeping the one they like, so the returns rate is high. Conversely, the returns rate on babygrows is very low.
That, along with customers generally being more selective at point of order, meant that we experienced a material reduction in returns rates. This allowed us to achieve sales growth far in excess of the growth in units we despatched from our warehouses.
Here’s a chart showing how the pandemic affected sales at Next: