UK's Next to mitigate Iran war costs with moderate price rises

07:00

British fashion retailer Next plc has announced plans to offset rising costs linked to tensions in the Middle East by implementing moderate price increases in selected international markets. The company also intends to rely on internal cost-saving measures to maintain profitability.

Impact of geopolitical tensions

The ongoing conflict involving Iran has raised concerns across global markets, particularly in sectors dependent on supply chains and consumer demand. Retailers are facing higher logistics and production costs, which are beginning to affect pricing strategies.

Other major European brands, such as H&M, have also warned that prolonged instability in the region could lead to higher prices and weaker consumer spending.

Strong sales performance despite uncertainty

Despite the challenging environment, Next reported a stronger-than-expected increase of 6.2% in full-price sales for the first quarter ending in early May. The company attributed this performance to robust demand at the beginning of the year, before geopolitical tensions intensified.

Revised profit outlook

Next has slightly raised its full-year profit forecast, now expecting pre-tax profits of approximately £1.218 billion, compared to earlier estimates of £1.210 billion. The company also projects a 5% growth in full-price sales over the full financial year.

Market reaction

Although performance has been solid, Next’s shares have declined by around 5% since the beginning of the year, reflecting investor caution amid global uncertainty.