Next, the FTSE 100 clothing retailer, just reported a blockbuster year, minting £1 billion in profits.
The 160-year-old company sells everything from clothing to home furnishings. On Thursday, it became only the fourth British retail company to ever hit the £1 billion ($1.3 billion) profit milestone, amid sluggish economic growth in the country.
Next’s pretax profits were up by 10% year over year in the 12 months to January, while sales soared by 8% to £6.3 billion ($8.15 billion), thanks to a strategic pivot to online retail and a slew of high-profile brand acquisitions, including FatFace and Reiss.
This shift has expanded the avenues through which shoppers buy Next’s products. The British company’s winning streak has taken place against a tumultuous backdrop for U.K. clothing retailers as Brits tighten their purse strings on nonessential spending. British fashion brands, in particular, have struggled to survive, as seen with Ted Baker and Matches both going bust in 2024.
“Next is the envy of the retail sector. Once again it has upgraded sales and profit guidance, leaving its rivals in the dust,” Russ Mould, an investment director at AJ Bell, said in a note. “Next is typically a cautious outfit, preferring to under-promise and over-deliver, which makes its latest optimism a surprise given the fragile market backdrop.”
Next is considered a bellwether of U.K. high-street health, given its millions of loyal U.K. customers. Despite the upbeat earnings, the retail group warned that budgetary tax measures that kick in in April would compress consumer confidence. Next said it plans to hike prices by 1% this year to offset an increase in staff wages and other tax expenses.
It seems economic hardship won’t come in the way of Next’s growth, as it raised its profit forecast for the year ending January 2026 to £1.1 billion ($1.42 billion).
What’s next for Next?
Over several years Next has simultaneously tackled costs while offering more products at its stores, which, along with its brand investments, have helped prop up earnings. While its U.K. business drives much of its sales, Next’s overseas presence is small but growing.
The British company plans to double down on its lucrative e-commerce business, which offers online retail help to third-party brands. In 2024, the profits from this division were up 24%, amounting to £13 million.
Next has consistently ranked as the U.K.’s top retailer, and last year, the London-listed company crossed the £900 million profit mark.
Simon Wolfson, Next’s long-serving CEO for 24 years, has been the architect of the group’s turnaround. Next was founded in 1982, but its history traces back to the 1860s when a tailoring company bought women’s wear group Kendall & Sons. It has expanded its retail footprint across the U.K., with over 400 stores.
Wolfson, the longest-serving FTSE 100 CEO, helped Next emerge from obscurity and become one of the country’s top retailers. The law graduate, now 57, started his Next career on the shop floor when his father was the company’s chairman.
He later became the CEO’s personal assistant before taking on the top job at the age of 33.
One of his unique strategies that put Next ahead of other British fashion chains was betting early on online retail and building it out with third-party brands. This helped the company survive the COVID-19 pandemic, which decimated many other retailers.
Wolfson has become synonymous with Next—he even personally writes the company’s 60-page results statement. That has left some investors concerned about what Next could look like when its chief departs or retires.
“Simon’s arguably the most successful CEO or strongest CEO in the FTSE 100 over the very long term. The flip side of that coin is a natural level of concern if at some point for any reason he wasn’t in the business,” James Goldstone, fund manager at one of Next’s biggest investors Invesco, told Reuters.
But Wolfson dismissed such worries, arguing that he’s “only 57.”
There’s no dearth of senior executives at Next, many of whom have served at the company—or its brands—for several decades.
No matter how Wolfson’s succession pans out, Next has managed to cement its business for the future by diversifying its revenue streams within retail.
Next’s shares were up 7% by midday London time. Its shares have jumped 166% in the past five years.
Representatives at Next didn’t immediately respond to Fortune’s request for comment.
