Next UK Expands Retail Footprint, Integrates Beauty Brands Despite Sales Decline
British retailer Next opened its largest store in Kent, UK, incorporating beauty brands, even as its physical store sales declined. This strategy focuses on securing cheaper retail space and integrating diverse brand offerings, providing insights for Asia's evolving retail landscape.
Next UK Opens Largest Store with Integrated Beauty Offering
British retailer Next recently launched its largest store to date, a 132,000 square foot location at Bluewater in Kent, UK. This new store triples Next’s previous footprint at the site and includes a 2,000 square foot Bath & Body Works unit, which Next operates in the UK.
The expansive retail space also features branded roomsets from Laura Ashley, Made, and Rockett St George, alongside a Costa cafe and the maternity brand Seraphine, which Next acquired last year. The design, by Dalziel & Pow, uses adaptable fixtures to allow for changes in department layouts without needing full refits. Landsec, the owner of the Bluewater center, described the deal as a strong endorsement of physical retail.
Strategic Shift Amidst Falling Store Sales
The expansion comes as Next reports a decline in store performance. The company’s full-price store sales decreased by 1.7 percent in the first half of the current year. Next forecasts a 3.0 percent fall in like-for-like store sales for this year, with store profit projected to drop from £193 million to £181 million.
Store margin is also expected to decrease from 10.2 percent to 9.7 percent. To counter these trends, Next has revised its investment criteria for new stores, now requiring a forecast internal rate of return of at least 27 percent. This translates to approximately a 30-month payback period on a five-year lease, a change from its previous 24-month target.
Cost-Efficient Store Design and Online Growth Focus
Next's strategy involves acquiring retail space at lower costs and reducing fit-out expenses, which have increased by 32 percent over the past decade. The company stated it no longer replaces functional floor finishes simply because they are off-brand. This cost-conscious approach was first implemented at its Thurrock Lakeside store, opened in July 2025.
Currently, physical stores contribute 32 percent of Next’s full-price sales, while UK online accounts for 46 percent and international online for 22 percent. International online sales saw significant growth, rising 35 percent last year and 36.9 percent in the second quarter, compared to 2.8 percent in the UK.
Implications for Asia's Beauty and Retail Markets
Next’s approach of securing large, cheaper retail spaces and integrating diverse brands, including beauty concessions, offers a model for Asia’s evolving retail landscape. As traditional department stores in Asia face challenges, this strategy demonstrates how a single omnichannel retailer can occupy substantial floor space and create a multi-brand physical presence.
For Asian beauty brands and retailers, this shows a potential pathway to expand physical footprints or integrate third-party beauty offerings into larger retail formats. The emphasis on cost-effective store design and leveraging international online growth could also inform strategic decisions for brands operating or expanding within Asia's competitive beauty economy.
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