We’ll survive a no-deal Brexit
Retail boss upbeat as profits rise
A NO-DEAL Brexit won’t force Next to hike prices, its boss declared yesterday.
Many business leaders fear crashing out of the EU with no trade deal will be disastrous, with import tariffs and a weak pound driving up costs. The fashion giant said it is preparing for a no-deal scenario next March – but boss Lord Wolfson, who backed leaving the EU – claimed it could cope. Announcing its half-year results it listed six risks to the business from a hard Brexit. But it only classes one as a big danger, which was the risk of delays at ports, and Wolfson claimed that could be minimised if moves were drawn up so customs checks on goods imported for Next, and other big firms, could be done in its warehouses rather than at docks. “If Government is considering these measures it would be very useful to share them with business,” he told The Mirror. Wolfson also said the Government had the freedom of the introduction of World Trade Organisation tariffs after Brexit.
And he claimed Next wouldn’t be hit hard by tariffs on EU imports as only 10% of its stock came from the bloc.
Asked whether Next’s prices would rise after a no-deal Brexit, he said: “I think it is unlikely. The most we think they will rise is 0.5%.”
Next bucked the retail gloom by announcing better than expected results for the six months to July. Shop sales still tumbled nearly 7% to £925million, and profits slumped 23% to £73.2m. But online takings rose 16.8% to £892m, and profits were up 21.2% to £163.3m.
It prompted the group to increase its full-year profit forecast by £10m to £727m.
Next has closed 15 large stores this year and seven clearance outlets, with leases on another 55 branches ending in 2018, although it has renegotiated some of those leases.
Next is also using stores for ‘reserve and collect’ online orders, has sub-let space to 164 concessions, and will begin trials to allow people to pick up goods they have ordered from rival internet retailers in Next stores.