Not many people remember the family-owned tailoring business, J Hepworth.
If you do remember it, and you were not particularly interested in stock market news in the early eighties, you might assume that the chain had gone the way of similarly fusty old gentleman’s outfitters, such as Dunn’s and John Collier (“the window to watch!“).
The company rebranded as NEXT in the eighties after a chain of womenswear shops of that name proved successful enough for the company to change the name of its menswear shops to NEXT as well.
At the time, the name change prompted some amusement and bewilderment in the City but unlike Royal Mail’s attempt to rebrand to Consignia, the new moniker stuck.
In retrospect, the rebranding was a master-stroke, shifting the company into the fast-changing (hence “Next!”) world of women’s fashion and allowing the company to market itself as a cooler version of Burton’s, the outfitters your Dad used to shop at on his way to the snooker hall above the store.
The George Davies era
At the time, George Davies, the man behind the rebranding, was the company’s star. He knows a thing or two about branding, having created the ‘George’ clothing line at Asda and ‘Per Una’ at M&S since being booted out of Next.
It all ended badly for Davies in 1988 when he was ousted in a high-profile boardroom coup that hit the front pages. The company was in a bad way but there was a school of thought that Davies, who had transformed the company, should be given time to put things right.
Was George Davies innocent? Opinions vary, but he was not to be the last retail titan at the company.
The rebranding of J Hepworth is an indication of a key element of Next’s success; not changing with the times but changing before the times.
It was very early into the mail-order game with the launch of its Next Directory in 1988 and that was crucial in enabling it to smoothly make the switch to online retailing in a way that Marks and Spencer Group PLC (LON:MKS) has not managed nearly so adroitly.
The Next Directory featured sample cloth swatches and was delivered to home or office within 48 hours from order at a time when all the competitors suggested a customer should allow 28 days for delivery.
Davies was succeeded by Sir David Jones, who had a background in the catalogue shopping world, having joined the company when it acquired mail order shopping heavyweight Gratton in 1986.
Jones, in turn, was succeeded by Simon Wolfson, who became the chief executive officer (CEO) in 2001.
A Wolfson in Next clothing
His appointment was not without controversy. His father, David Wolfson, had been chairman of Next from 1990 until 1998, a period that also marked the arrival of his son at the firm as “its most highly paid sales consultant ever,” if Wikipedia is to believed.
Anyone arguing that his appointment as CEO was pure nepotism would have a hard time backing that up as Wolfson – Baron Wolfson of Aspley Guise as he now is – has shown a sure touch navigating often very choppy retail waters.
Wolfson’s style is to under-promise and over-deliver, and even though everyone in the City knows he is doing this, he still manages to surprise them.
The retailer has also been successful in avoiding having a sale all year long, unlike many of its competitors, for whom discounting seems to be a way of life.
Wolfson and his team seem to have a knack of spotting what is coming down the turnpike and acting swiftly to either capitalise on what’s coming or, if there is bad news, to head it off at the pass, as they used to say in Westerns.
Witness the decision during the first lockdown to suspend share buybacks and dividends and bolster cash resources buy selling assets.
“When the pandemic first appeared in China, we assumed that the threat was to our supply chain. It is now very clear that the risk to demand is by far the greatest challenge we face and we need to prepare for a significant downturn in sales for the duration of the pandemic,” the company said in its full-year results statement for the year ending January 2020, released four days before the first UK lockdown.
Even while battening down the hatches, the focus has not just been about survival; the company has continued to invest in its information technology systems, its warehouse facilities and its supply chain management.
“We have to keep the business moving forward, keep developing the business,” Wolfson was quoted as saying at the time of the results announcement in March.
“Remember, this will end and when it does end it will be the things that we’ve done to innovate and move the business forward that will make the difference.”