Next faces City backlash over top job for Wolfson

Lord Wolfson of Sunningdale, the chairman of Next, yesterday risked accusations of nepotism after his son was promoted to the main board of the pounds 2bn retail empire at the age of just 29.

The controversial appointment means Simon Wolfson is almost certainly the youngest director of an FTSE 100 company. He joins a small band of young businessmen who have been promoted to the boards of large companies by powerful fathers. Others include Robert Hanson at the Hanson conglomerate and the late Simon Weinstock at GEC.

The young scion of the Wolfson dynasty has never worked outside Next and has only six years' business experience. He will be one of just five executive directors at the company with responsibility for sales and marketing as well as the development of the Next brand.

His appointment is another example of the continuing close links between Next and Great Universal Stores, the mail order giant. Lord Wolfson, 61, is chairman of both companies, having taken over from his cousin at the helm of GUS in September.

Next's institutional investors and City analysts expressed concern at the new appointment, saying it "left a bad odour" and could backfire.

One of Next's largest shareholders said: "On the surface it does seem a bit unusual. But Next has made such progress since it clawed itself back from the brink that you tend to give it the benefit of the doubt."

Another fund manager at a big institution was more doubtful. "Things like this normally leave a rather bad smell. I would think there would be a certain amount of disquiet about it."

Retail analysts said the young Wolfson was unknown in the City and had never appeared at Next's presentations to analysts.

Nick Bubb of MeesPierson said: "I'm told he's very capable and that David Jones [Next's chief executive] thinks highly of him. But given the accusations about nepotism one would have thought that they would want to be doubly sure of his abilities."

Mr Jones said the company had been conscious that the appointment might attract suggestions of nepotism. But he said: "It was not the chairman's appointment, it was mine. Simon's introduction to the company and his promotion have been at my instigation. He is an outstanding young man and if you don't look after your young people, you lose them."

The appointment was proposed by Mr Jones and his fellow executive directors at a board meeting last Thursday, then approved by the entire board.

Mr Jones said he was surprised that Mr Wolfson appeared to be unknown to the City. "Over the past 12 to 18 months he has been exposed to retail analysts and shareholders. He is pretty well known to the majority of institutional shareholders and analysts."

Mr Wolfson joined Next in 1991 when he was 23. His first job was as sales manager of Next Retail, which then had 312 stores. When Next combined the retail division with the mail order division, Next Directory, in 1993 Mr Wolfson became sales and marketing director of the Next brand.

His 900,000 shares in the company were worth pounds 5.07m at last night's closing price of 563.5p, down a penny. He also has options over a further 60,000 shares exercisable at prices between 237p-530p.

Next appeared conscious of the potential storm Mr Wolfson's appointment could create by issuing the bare minimum of information. The Stock Exchange statement ran to only a few sentences.

Comment, page 19

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