NEXT AND DEBENHAMS ANALYSIS
CONTEXT
Next plc and Debenhams are UK based competitors in the retail industry offering a wide range of fashion clothing, footwear, accessories , cosmetics and home products. Next PLC distributes its products through different channels that NEXT retail, NEXT directory and NEXT international, NEXT sourcing and Lipsy and its NEXT primary financial objective is to deliver sustainable long term growth in earnings per share, Underlying EPS value increased by 16.6% from 2012 and EPS share price has increased by more than 300% in the last ten years. On the other hand ,Debenhams distributes its products under various international brands it is currently available in 92 countries online and in store Debenhams monitors all aspects its working capital in order to achieve its financial objective of deleveraging the balance sheet and it does this by effectively managing the key performance indicators.
In the External context, the retail industry is flooded with a large number of competitors producing similar products and serving the same markets. The bargaining power of Popular brands like Next and Debenhams is low as they are now competing with E-retailers who are willing to offer similar goods at relatively low prices. In addition to this the increased level of globalization has opened up new markets (China)that were once inaccessible to customers this has further intensified the level of competition in the retail industry. On the other hand the bargaining power of the buyers is high as they face low switching costs from one retailer to another and a high variety of retailers to choose from.
OVERVIEW
The report reviews and compares the financial performance of two key players (Next and Debenhams) in the retail industry using their financial statements and computed financial ratios.
OVERVIEW
NEXT 2013
NEXT 2012
%CHANGE
DEBENHAMS 2012
DEBENHAMS 2011
% CHANGE
SALES REVENUE (£M)
3548
3441
3.1%
2230
2210
0.90%
PBIT (£M)
687
606
13.40%
175
184
Next plc and Debenhams are UK based competitors in the retail industry offering a wide range of fashion clothing, footwear, accessories , cosmetics and home products. Next PLC distributes its products through different channels that NEXT retail, NEXT directory and NEXT international, NEXT sourcing and Lipsy and its NEXT primary financial objective is to deliver sustainable long term growth in earnings per share, Underlying EPS value increased by 16.6% from 2012 and EPS share price has increased by more than 300% in the last ten years. On the other hand ,Debenhams distributes its products under various international brands it is currently available in 92 countries online and in store Debenhams monitors all aspects its working capital in order to achieve its financial objective of deleveraging the balance sheet and it does this by effectively managing the key performance indicators.
In the External context, the retail industry is flooded with a large number of competitors producing similar products and serving the same markets. The bargaining power of Popular brands like Next and Debenhams is low as they are now competing with E-retailers who are willing to offer similar goods at relatively low prices. In addition to this the increased level of globalization has opened up new markets (China)that were once inaccessible to customers this has further intensified the level of competition in the retail industry. On the other hand the bargaining power of the buyers is high as they face low switching costs from one retailer to another and a high variety of retailers to choose from.
OVERVIEW
The report reviews and compares the financial performance of two key players (Next and Debenhams) in the retail industry using their financial statements and computed financial ratios.
OVERVIEW
NEXT 2013
NEXT 2012
%CHANGE
DEBENHAMS 2012
DEBENHAMS 2011
% CHANGE
SALES REVENUE (£M)
3548
3441
3.1%
2230
2210
0.90%
PBIT (£M)
687
606
13.40%
175
184