Next Gets Sliced by the Red Sea Roller‑Coaster
Simon Wolfson, Next’s CEO, just threw a red‑flag warning: attacks on container ships in the Red Sea could push shipping timelines back by 2‑2½ weeks. That means the next wave of fashion and furniture will stop at the doorstep of the UK for a while longer.
What’s Really Going On?
- Shipping reroutes – If vessels ditch the Suez Canal and go a longer detour, the cargo that normally lands in the UK per year is delayed.
- Extra costs – The detour means higher fuel and handling charges.
- Sales impact – A prolonged delay isn’t a “minor hiccup.” Wolfson says it could swell lead times and, if it sticks around, could bite into sales figures.
- Prices stay flat for 2024‑Jan 2025, because Next’s own costs finally look steady after three years of volatility.
Why the Fear Exists
The Red Sea attacks, backed by Iranian‑aligned Houthis, keep shipping lanes unsafe. “If the route is avoided, we’ll have a manageable – but real – delay,” Wolfson added. The extra freight charges to avoid the nubs of the channel aren’t just a cost—they’re a potential price bump for shoppers.
Wage Worries, Too
Next’s payroll is running in the backdrop of the National Living Wage hike, meaning even with other costs holding steady, Next can’t slash prices. “We’re holding our prices flat,” Wolfson explained—well, at least until the next holiday season.
Kicking it into the Profit Zone
Despite the turbulence:
- Shares climbed 5% after the announcement.
- Profit forecast now stands at £905 million for the year ending 27 January, a ~4% bump on 2022/23.
- Underlying pre‑tax profits are projected at £960 million, a 5% rise.
The big message: Wolfson is “nervous about next year’s employment levels” and whether the company’s workforce can stay as strong as it is now.
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