The next bets on the department store of the future

Trials of hybrid stores, selling only cosmetics and household items, were first unveiled in July 2020. The Beauty & Home stores are selling more than 250 products previously only available on Next online.

By adding clothing and other well-known brands, Next is effectively competing for the former footfall of rival Debenhams after its demise which left 160 units vacant. Only about 14 of the 48 stores slated for re-letting or repurposing are currently in operation. Its biggest new occupant is Next, which has opened four of its beauty and home stores at former Debenhams sites.

“I think it’s to gain market share, I don’t think it’s to gain a physical footprint,” the adviser says. “Beauty in particular is an area where physical presence is still very important.”

The focus is on store type rather than volume. Next has reduced its footprint from 538 stores to 491 over the past five years. And the scope for expansion is limited, adds the adviser: “They don’t have to get carried away with the amount of space they take up because a lot of their sales will stay online.”

This caution is supported by Next’s own investment plans. In its latest annual report, the chain allocated £48m for store expansion between 2023 and 2025, compared to £230m for its warehouse operations, which it is now allowing other retailers to use. access for a fee.

Online sales still account for its largest share, bringing in £1.2bn compared to £540m in stores in the six months to July.

In a City update on March 24, Next expects to make a pre-tax profit of £822m for the year to January following a rebound in sales.

Department stores have taken a big hit in recent years. But it looks like if anyone has a chance to breathe new life into them, it’s Next.