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Wolfson

lse:nxt

#1

Some interesting ideas :-

Attention to detail in retail important, so perhaps that explains how Next stays ahead of the pack. Many CEOs talk about all manner of nebulous reasons for their performance, but Next boss Simon Wolfson prefers numbers, logic and reason.

Examples of this appear in Next’s public reports — the good description of when Next buys back shares, and the long-term feasibiity of physical stores. Not many CEOs would talk about such serious questions so openly.

“He’s really interested in the business side of business, the numbers, the rates of return,” said one person who has worked with him. “Money is not the driving thing in his life — and there is little desire for glamour.” He dislikes the limelight, and often refuses interviews.

His evidence-based approach was often incompatible with the reality of politics, an area where the Tory peer was once tipped for great things. One road-building proposal prompted the commentator Quentin Letts to describe him as “a Thatcherite egghead.” He donated to the 2005 leadership campaign of David Cameron, who ennobled him in 2010, and his wife was a member of former chancellor George Osborne’s staff.

John Redwood, the Conservative MP who worked with him on a policy documents in 2007, said Lord Wolfson was uninterested in a political career. “I think he may have looked at the choice between being a junior minister in the Lords and the head of Next, and concluded that he was better off where he was,” said Sir John.

A supporter of lower taxes and lighter regulation, he opposed the minimum wage, dislikes the UK’s planning system and is better known these days for his advocacy of Brexit. Here too, his approach is that of the liberal pragmatist. He argued in favour of Theresa May’s withdrawal agreement, saying that while it was imperfect, both sides “need to listen to reason and compromise a little”.

Born into a retail dynasty synonymous with Great Universal Stores — a grand conglomerate in which the Wolfson family held a sizeable stake before it was finally broken up in the early noughties — he was privately educated at Radley College near Oxford before reading law at Cambridge university.

His own retail career almost ended before it really began. A short stint on the Next shop floor in Kensington was meant to be a precursor to a job in management consultancy. But David Jones, its then-CEO, had other ideas. In 1991, Mr Jones installed the “shy and intense” young man as an assistant in his office and by 1994 was telling associates that he had found his preferred successor. “He had that rare talent . . . of being able to analyse a problem and find a solution very quickly.”

Cries of nepotism were inevitable when Mr Wolfson was promoted to board level in 1997. He was still only in his twenties, and his father David Wolfson — Lord Wolfson of Sunningdale — was chairman of Next at the time. Three years after Wolfson senior had moved back to GUS, Simon was appointed CEO at the age of 33, becoming the youngest person to run a UK blue-chip company.

His 18-year tenure in the job is now second only to Bronek Masojada’s 19 years at the helm of Hiscox, although unlike Next, the insurer has not been a FTSE 100 constituent throughout. The total return from Next shares since his appointment has been 775 per cent, thrashing that of the FTSE 100, the retail sector and key rivals such as Marks and Spencer.

Although there have been hiccups, such as the range errors that made for a poor 2017, the basics of selling mid-priced fashion to thirtysomethings have generally been executed “ruthlessly well,” in the words of one former senior colleague. “He is not controlling, but has enough command of the detail to understand the grass roots of the stores.”

Next’s head office, a campus just off a motorway near Leicester, is miles from the rag trade’s traditional heartland behind London’s Oxford Street, and some think this facilitates its strong focus.

Strategic decisions are typically opportune. Next balanced investment in the business with returns to shareholders. It kept its store estate flexible. It quickly realised it needed to shift its catalogue business online. The company now makes more than half its sales online, against less than a fifth at rivals such as M&S and Debenhams, which helped it outstrip expectations with this week’s Christmas trading update.

He also continued the family tradition of philanthropy; the Wolfson Prize is the second-biggest economics award in the world after the Nobel.

“He is this slightly Victorian liberal philanthropist figure, who sees the power of improving things through the application of reason, logic and market forces,” said Julian Glover, who worked him on the prize while at think-tank Policy Exchange. “He is ever the rationalist.”