Next makes shock online move into fitted kitchens

The retailer has introduced 16 of its own-brand fitted kitchens and bathrooms and hired specialist Hammonds to produce a bedroom range.

The venture signals the growing importance of online to Next and shows the web will be a key battleground for retailers this year, given the fragile state of the fashion sector after poor festive trade.

Next chief executive Simon Wolfson said e-tail provided him with “infinite” possibilities. “The new products are a good fit for us in terms of a comprehensive home offer. We will continue to look for new areas,” he said. Next opened a London flagship standalone Home store in November.

Directory sales, including online and catalogue, grew 2.2 per cent between July 30 and December 24. This was against a 3.2 per cent like-for-like drop at its 309 stores unaffected by openings.

Retail Knowledge Bank senior partner Robert Clark said the kitchens and bathrooms will threaten both mid- and upmarket furniture retailers, including Homebase, Ikea and MFI. “Next is a very respected retail brand. But it will have to be careful. It needs to maintain service standards that it wants to be associated with – this will take time,” he said.

Despite tough Christmas trade on the high street, Wolfson said his policy not to discount early was the right one. He said: “I am glad we waited until after Christmas to go to Sale. We have maintained our margins and will be up against real numbers next year. It also means we have kept price integrity with customers.”

SHORT-SELLERS TARGET NEXT

Short-selling of Next shares has jumped in the past two weeks.

The proportion of Next shares on loan to short investors rose from 5 to 7 per cent over the period, research by specialist monitor Data Explorers showed.

Short-sellers typically trade stock they do not own in the expectation of benefiting from share price falls and have increasingly targeted retailers.

Last week, the percentage of Debenhams’ stock on loan climbed from 20 to 25 per cent in seven days.