Wolfsons maintain the family tradition at Next

As young Turks go, Simon Wolfson is pretty young. To get to be chief executive of a £3bn company at the age of 33 is rare if not unprecedented. There have been younger heads of smaller companies, but it's hard to think of it happening at a company which stands on the threshold of the FTSE 100. Not that the boy Wolfson's promotion should come as a surprise to anyone. Next has been preparing the way for his elevation virtually from the moment he arrived 10 years ago as a humble shop assistant, for he is, after all, his father's son, and his father, Lord Wolfson, was chairman of Next from 1990 to 1998.

As young Turks go, Simon Wolfson is pretty young. To get to be chief executive of a £3bn company at the age of 33 is rare if not unprecedented. There have been younger heads of smaller companies, but it's hard to think of it happening at a company which stands on the threshold of the FTSE 100. Not that the boy Wolfson's promotion should come as a surprise to anyone. Next has been preparing the way for his elevation virtually from the moment he arrived 10 years ago as a humble shop assistant, for he is, after all, his father's son, and his father, Lord Wolfson, was chairman of Next from 1990 to 1998.

Obviously he would not now be getting the job were it not for this fact. That doesn't necessarily mean he's wrong for the role, however, or even too young for it. Mr Wolfson's lack of broad business experience must be a handicap, but as England football managers are wont to remark, if you are good enough, you are old enough. Mr Wolfson has held a variety of senior positions in the business, has impressed his fellow board members, and he's impressed the City too.

The credit for the great Next turnaround will always go to David Jones and Lord Wolfson. But Wolfson junior played his part in keeping the Next bandwagon rolling during difficult times on the high street. Sir Brian Pitman, Next's chairman, is no fool and would not have sanctioned the appointment if he didn't think Mr Wolfson was up to it.

Even so, the City is right to be worried. The precedents for sons taking on the business mantle of famous fathers are not good. The most obvious example is Sir Rocco Forte, who saw the family hotel empire snatched away after a long period of underperformance. Certainly it is hard to imagine any other sales assistant being plucked from the obscurity of the shop floor to become personal assistant to the chief executive just two years after leaving university. Nor has Simon Wolfson ever taken the opportunity to work outside Next and prove himself on neutral territory.

It's very much part of the Wolfson tradition to keep businesses in the family, even when they are owned by others. At Great Universal Stores, they managed it across three generations, and it was only last year that they finally loosened their grip. But it is not the way of the modern world, and with good reason the City mistrusts it.

For the next year, Simon Wolfson will at least have the benefit of Sir Brian as his chairman to help keep him on the straight and narrow. After that David Jones, the current chief executive, will step into Sir Brian's shoes. The company is also expected to appoint two heavyweight non-executive directors to strengthen the board, so there can be no complaints on corporate governance grounds.

Mr Wolfson may prove the sceptics wrong, but he will have to work doubly hard to do so.

Capital slowdown

Will it be the famous Tarrant "two in a row" from Capital Radio? That's what the analysts are saying as the City braces itself for an interim profits statement today which is expected to warn for the second time this year of lower profits to come. That the advertising market is much weaker than this time last year shouldn't come as a surprise to anyone. A year ago, dot.com advertising was still buoyant. Round at Capital it accounted for as much as 10 per cent of all revenues at its peak. That's now disappeared entirely. So too has much of the other computer-related advertising that buoyed Capital's profits a year ago.

But it's worse than that. Taking their cue from America, many of the big multinationals are cutting their marketing spend across the globe, and that includes regions where consumer spending remains resilient. Radio is still regarded by many advertisers as a marginal advertising medium. The result is that it does disproportionately well during any upturn in the market as a spillover from the more favoured medium of TV. By the same token, however, it does disproportionately badly in the downturn. As advertising spend gets cut, radio gets cut first.

For those of a gloomy disposition, the really worrying thing is that Capital Radio's travails may be a harbinger of things to come for the London economy as a whole. Reliable figures are hard to come by, but all the anecdotal evidence is that London has been experiencing some of the same turbo-charged dynamism as the soaraway US economy in recent years. The big growth industries of technology, telecommunications and media are all largely based in London and the South-east. The buoyancy of these industries has been more than matched by the City, which despite stock market turbulence has just experienced its best year ever. The City is the umbilical cord that links London to the fortunes of Wall Street and the US economy, so it is just as likely to work the other way round.

No economy, region or city can carry on growing at the sort of rate London has been enjoying indefinitely, and it may be that our capital city is about to see the same sort of dramatic slowdown that has engulfed the US. Alarmist stuff perhaps. House prices are still rising at a fair old tick and it is still impossible to get a plumber or taxi when you need one. But as the US has shown, the slowdown can come with devastating speed and there's hardly a company in London and the South-east which isn't already implementing or actively considering a programme of cutbacks to address the possibility of harsher times to come. Job loss in the TMT sectors is now as common as the job creation of a year ago. Advertising is one of the most reliable lead indicators of a downturn there is, since it is such an easy form of expenditure to cut. Let's just hope that things don't get as bad as Capital's figures are likely to be.

Coffee trouble

Ever since the Seattle riots a year and a half ago, Starbucks has been treated by protesters as symbolic of the evils of globalisation. It was Starbucks' bad luck that it comes from Seattle and has an outlet on virtually every street corner there. But there's more to it than that. You don't get much change out of three pounds for a caramel Frappoccino these days, which is rather more than the average daily wage of those who labour in the coffee plantations of Latin America, Africa and the Indian subcontinent. And while profits at Starbucks have been soaring, the commodity price of coffee has been plummeting.

Unfair, scream leaders of the coffee producing nations, who have strangely chosen London, home of the three pound coffee, and not Kenya, Brazil or India, to hold their first ever World Coffee Conference. There have been a few reprieves caused largely by crop failure, but in broad terms the commodity price of coffee has been in constant decline for the best part of two decades, and is now close to its 30-year low. Free trade and globalisation is meant to bring all kinds of benefits to the third and developing world, but it hasn't worked that way for the coffee producers.

Over the last three years, the export price of coffee as a proportion of the retail price has fallen by half, to less than 7 per cent, and compared with the Starbucks price the difference is off the scale. The producers want to get higher up the value chain by, for instance, doing the roasting, milling and packaging themselves, but find themselves often prevented by tariff barriers.

Their case is a good one, but the sad truth is that they are never going to get the gold plated value generated by Starbucks, where the price of the coffee itself is only a marginal element of the service provided. It's the same problem as besets Britain's farmers. Coffee, like base metal, cereal or livestock, is a commodity and the value is created not by producing it, but out of what's done with it. It's unfair, but it's also the way of the world.

j.warner@independent.co.uk