next 2Fashion retailer Next plans to improve its delivery services later this year with new collect and return options and a two-hour pre-advised window for home deliveries.

It is targeting a September roll-out for the collection and return of goods through third party parcel shops while it expects to have the new narrower delivery window in place in December.

The retailer’s results for the year to January 2016 show a 4.9 per cent rise in operating profit to £851.8 million on sales up 3.7 per cent to £4 billion, with the strongest growth coming from Next Directory.

But despite the strong performance, chief executive Lord Wolfson warned: “It looks as though we may be set for a challenging year, with economic and cyclical factors potentially working against us. We are very clear about where we need to focus our energies in the year ahead”

The company has set out plans for operational improvements at its distribution hubs, which now include Russia, China, and Germany as well as the UK. These will focus on:

* Stock level management within the hubs and bulk replenishment methods from the UK

* Cost management and efficiency

* Expanding the territorial reach of hubs (mainly from the German hub)

* Stock rebalancing between the hubs and the UK

It is also working on improvements to the buying process; upgrading the UK Directory business; expanding the UK retail store network; and controlling costs.

“In many ways we have more to do than ever before with complex challenges to our working practices across product, marketing and systems,” said Lord Wolfson. “It may well feel like walking up the down escalator, with a great deal of effort required to stand still. It will not be the first time we have felt this way, and our experience is that the effort put into improving the business in tough times can pay handsome rewards when conditions improve.”

By Alison