Next to Raise Prices up to 8% in Non-European Countries Amid US-Israel-Iran War Costs

Fashion and homeware chain Next plans to raise prices by up to 8% in some countries outside Europe. The company anticipates millions of pounds in extra costs from the US-Israel war with Iran.

Next said it faces an additional £47 million in costs this year from higher fuel prices and global supply chain disruptions caused by the Middle East conflict.

The retailer will hike prices in some international markets starting in May. Cost savings efforts mean it does not need to impose extra price increases in the UK and Europe.

The forecast assumes fuel costs stay near current levels and supply chain issues neither worsen nor improve.

Fuel prices surged after war broke out in the Middle East in late February. The Strait of Hormuz, a key global shipping lane, remains effectively closed.

About a fifth of world oil and gas shipments pass through the strait. Iran has vowed to keep it closed as long as the US maintains its blockade of Iranian ports.

Next initially expected £15 million in added costs from the war, covering just the first three months after the US and Israel launched attacks on Iran.

The company raised its full-year profit forecast to £1.22 billion from £1.21 billion. Full-price sales rose 6.2% in the first quarter.

Next said UK cost increases will be offset by cost savings and margin gains from better factory-gate prices.

It does not plan to raise UK prices by more than the 0.6% forecast at the start of the year.

The conflict caused considerable disruption to service in the region, but trade began to recover toward the end of the quarter.

International sales dropped when the conflict started. "Over the last few weeks we have seen significant recovery, albeit growth was not as strong as in the first five weeks of the year," the company said.

In Europe, cost increases have been offset by currency gains, so no price hikes are needed.

"Price increases outside Europe will vary by country, but will be no more than +8% in any territory," it added.

Next operates 700 stores worldwide, with about 500 in the UK. It owns brands such as FatFace and Cath Kidston and holds stakes in Gap, Victoria's Secret and Reiss.