Next aims to be 'Ocado of fashion' as it grows third-party offer, launches Laura Ashley new designs
As Next continues its acquisition strategy with its Reiss stake purchase and option to take full control, the company has ambitious plans to transform its business model and leverage its £2 billion online business to become the ‘Ocado of fashion retail’.
Reiss will be the biggest name so far to operate on its ‘total platform’ and its link with the label comes as the company also unveils the latest Laura Ashley collection following an earlier deal to launch the brand’s homewares in-store and online.
As of Monday, Laura Ashley has officially launched its SS21 collection, featuring brand-new designs as well as more traditional pieces, via Next. The retailer will feature the label on its website and it will also be available on Laura Ashley’s own webstore. There will be in-store product in 48 Next locations once shops reopen, and a dedicated flagship store-in-store at Westfield London.
Following its acquisition in April 2020 by investment firm Gordon Brothers, this is the Laura Ashley brand’s first step in generating a portfolio of licensees to build strategic wholesale and retail relationships.
And while this is important for Laura Ashley, it’s equally important for Next, which is pivoting from being a company selling its own brand — but with its Label operation that also sells other labels — into a third-party technology powerhouse. As well as deals such as the acquisition of the Victoria’s Secret UK operation, the new Reiss buy, the launch of its premium beauty chain and Laura Ashley, there’s a lot more going on at the company.
The Times on Monday spoke to Next chief Simon Wolfson and said the company faces a future in which it’s aiming to be “the Ocado of fashion” after a platform extension to host smaller and mid-sized brands, with the Reiss stake a key step in this goal.
Building from its existing logistics, customer databases, warehousing strength, currency exchange capabilities, customer services and website translation, it’s building a “total platform” business to become more like a tech partner for fashion than a high street chain.
The newspaper said this could potentially “reach further than Shopify” as it includes all distribution and fulfilment, not just web and payment services.
For now, it hosts only upscale kidswear label Childsplay, but the plan is to target more brands with a fixed commission offer that reduces those brands’ risk if they make the occasional seasonal misstep.
The group has invested heavily in its teams and its tech with the development happening in-house.
As well as Ocado, its plan has been compared to what The Hut Group offers third parties via its THG Ingenuity offer.
THG Ingenuity has already signed up some big names and while Childsplay doesn’t come under the 'big' category, Next will move the much-higher-profile Reiss to the platform. Wolfson told the newspaper that fashion brands turning over between £50 million to £250 million in sales are the “sweet spot”. Once Wolfson is happy that Reiss is a success on the platform, he’ll be looking to sign even bigger brands.
And despite the Ocado/THG comparisons, Wolfson said he didn’t think there was “any comparable offer in terms of total service on offer”. However, he added that it will take a while for the platform to “deliver meaningful profit”.
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