Next interiors range to be relaunched in bigger stores: Fashion retailer pushes for growth as pre-tax profits soar

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The Independent Online
NEXT, the fashion retailer, is relaunching its interiors range and increasing the size of some stores to squeeze more growth out of the British high street.

Lord Wolfson, chairman, said about a third of its 302 stores were above 3,500 square feet, allowing them to offer the full range of ladies, mens and childrenswear. Others in small towns were unlikely to be expanded, but Lord Wolfson said there were about 100 stores where Next would like to add about 1,000 square feet by taking space next door or on other floors.

'If we increase the size of the stores, by being able to display the merchandise better, we will increase sales,' he said.

The new interiors range to be launched in February will offer the bedding, fabric and wallpaper ranges in four different colours. It will be tested in six stores before being rolled out to the 59 that include the range. Lord Wolfson said it might be extended to more if it was successful. The business lost pounds 900,000 in the six months to July.

Next has also been testing its formula in the US, where it has opened a fourth store in a shopping mall near Boston. Lord Wolfson said it would review the results of the trial when the stores had been trading for at least a year.

The expansion plans were disclosed as the group revealed a 60 per cent rise in pre-tax profits to pounds 36.9m, on sales 17.7 per cent ahead, in the six months to July. The store chain and the mail order directory - which now carry the same ranges - achieved sales growth of 19.1 and 18.8 per cent respectively.

David Jones, chief executive, said both had continued to perform well so far in the second half, with the directory achieving a 30 per cent increase and the stores 18 per cent up. But he warned that sales in the three months before Christmas 1993 had been excellent, which would make it difficult to sustain those levels of increase.

The City took the warning to heart and marked the shares down 15p to 243p, despite the 33 per cent rise in earnings to 7.3p a share and an 83 per cent increase in the dividend to 2.75p.

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