Comment

Next fashions a calm path through the storms threatening high street

Years of good management meant Next entered lockdown fitter than most of its retail competitors

Simon Wolfson
Simon Wolfson has proved to be possibly the best retailer of his generation: calm, sure footed and far sighted Credit: Stephen Lock 

Q: Next seems to have been one of the retail success stories of the Covid crisis, recently posting a lower than expected fall in quarterly sales and upgraded profit guidance. What has it got right and is it getting right in your opinion?

A: Thanks to a history of sound strategic decisions, Next’s evolution has been in tune with market trends for most of its 38 years since opening in 1982.

Next was born with a silver spoon in its mouth. George Davies developed a revolutionary retail concept when Hepworths, the tailoring chain, bought more than 100 Kendalls Rainwear shops and converted them to tastefully designed, colour coordinated ladieswear shops. They were an overnight success. 

Within two years, Davies was turning Hepworth stores over to the Next fascia, before launching a frenetic development of the format into several directions at once. He quickly came up with Next for Men and Next Accessories, developed Next Childrenswear, and acquired Gratton Mail Order, which helped to support the Next Directory.

By 1988, it became clear that Next had grown too quickly in too many different markets. The share price dropped to next to nothing and it nearly went out of business. Davies was succeeded by Gratton chief executive David Jones, who carefully cut out the unprofitable stores and brought the business back to life. The genius of the original Next idea, combined with the measured recovery led by David Jones, was the foundation of an uninterrupted success story.

In 2001, Jones handed the reins over to 33-year-old Simon Wolfson, who has proved to be possibly the best retailer of his generation: calm, sure footed and far sighted. 

He capitalised on the early link to mail order that has developed into a substantial online business (a perfect protection for poor high street footfall). The business has also developed its offer out of town – another example of how it has kept up with the market.

Years of good management meant Next entered lockdown fitter than most of its retail competitors, which is why its sales are better than most in this horrendous time. Next is a good bet to be one of the Covid crisis’ most successful survivors.

Q: What’s your advice for dealing with difficult clients? We’re a small agency and one of our larger brands, who brings in good money, is causing us lots of headaches through wanting things they know we can’t give them and just generally being difficult. They don’t listen or seem to read our emails, and our contact there can be quite abrasive with our staff, which is lowering morale. What would you recommend?

A: It sounds like you have drawn the short straw. You are working with a person who doesn’t realise that good business is usually based on cooperation rather than confrontation.

In my experience, long-term business relations are created by a partnership between buyer and supplier, who work together to achieve a good deal for both sides. The macho negotiating tactics and impossible demands that you are experiencing suggest you’re dealing with a company that has a brutal culture or an inexperienced executive who has picked up a few tips from The Apprentice. 

If you’re keen to keep this account, the challenge is to modify your contact’s behaviour without destroying the relationship. You will have to put up with more headaches over the next few months, as things are unlikely to change overnight. Bite your tongue, sit firmly on the moral high ground and be patient, but firm.

Assuming that you’re not already dealing directly with the big boss, you may need to meet your contact’s senior manager, who probably doesn’t realise the impossible position you’re being put in. Don’t worry about the consequences; your abrasive buyer may feel offended when you appeal to higher authority, but by being honest, you’re doing your customer a big favour.

With luck, this serious chat with senior management will do the trick, with your contact changing their attitude or moving off your account. If nothing changes, you need to question how much you need their business. 

You shouldn’t have to deal with miserable merchants to make money. Doing business should be fun.

Sir John Timpson is chairman of the high-street services provider, Timpson.

Send him a question at [email protected]