Next Faces £15M Costs from Middle East Conflict

British fashion and homeware retailer Next has disclosed a £15 million cost increase stemming from the ongoing conflict in the Middle East, warning that prolonged disruptions could force the company to raise prices for consumers.

The company, which operates over 500 stores primarily in the UK, reported the financial strain in its latest earnings update on Thursday. The additional expenses arise from elevated fuel and air freight costs, triggered by shipping interruptions and rising oil prices linked to the Iran conflict. Next has allocated funds to cover these for an assumed three-month duration, offsetting the impact through operational savings elsewhere. However, Chief Executive Lord Simon Wolfson stated that the firm is preparing for potential escalation. "We have accounted for £15 million of additional costs that are likely to arise from the conflict, such as fuel and air freight, on the assumption that the disruption lasts for three months," Wolfson said. "These costs have been offset by savings elsewhere, so do not affect our guidance. Beyond the next three months, if we see these costs persist, then we will begin to pass costs through as higher pricing, but for today...