Next boss warns of sharp rises in clothes prices
Thursday 04 November 2010
Simon Wolfson, Next's chief executive, has warned that a "speculative bubble" in the cotton market will lead to near-double-digit price rises on clothing next year, as the fashion retailer's underlying sales slipped behind City expectations in its third quarter. Next has previously warned that a surge in cotton prices would cause a 5 to 8 per cent rise in clothing prices in the first quarter, but Lord Wolfson said yesterday that the uplift would be at the top end of the range.
He said: "People are reserving forward and buying forward cotton [contracts for delivery in the future] and securing their supplies because they have [got] their fingers burnt. And that is pushing up the price."
This week, the British Retail Consortium said cotton has risen 90 per cent over the past 12 months, which contributed to overall shop price inflation hitting 2.2 per cent in October.
But Lord Wolfson stressed that cotton was just one part of the price equation and cited increased competition for manufacturing facilities in China.
He said: "Capacity is an issue across the industry. Rising wages in the Far East and capacity constraints are other issues. We are definitely pushing more aggressively into new territories." Next is looking to move more manufacturing to countries, including Vietnam, Bangladesh and Laos.
For the third quarter to 30 October, total retail sales at Next fell by 0.3 per cent.
- 1 BBC told new political editor must be 'impartial' with Nick Robinson reportedly stepping down
- 2 Number of young homeless people in Britain is 'more than three times the official figures'
- 3 The map showing the most dangerous tourist destinations in Europe, according to the Foreign Office
- 4 The biggest first date turnoff has been revealed
- 5 German man found living with 300 rats in tiny apartment
BBC told new political editor must be 'impartial' with Nick Robinson reportedly stepping down
Humans of New York image of crying gay teen receives best response yet from Ellen DeGeneres
Isis propaganda video shows 25 Syrian soldiers executed by teenage militants in Palmyra
Number of young homeless people in Britain is 'more than three times the official figures'
Budget 2015: George Osborne to axe subsidies for higher income earners in social housing
More Britons believe that multiculturalism makes the country worse - not better, says poll
Nathan Collier: Montana man inspired by same-sex marriage ruling requests right to wed two wives
Greece crisis: IMF was pushed around by Angela Merkel and Nicholas Sarkozy – and now it is being humiliated
'I wish the BBC would stop calling it Islamic State' – David Cameron unleashes frustration at broadcaster
Forget little green men – aliens will look like humans, says Cambridge University evolution expert
Girl, 7, stares down hate preacher at Ohio festival with pro-LGBT rainbow flag gesture
iJobs Money & Business
£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...
£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...
£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....
£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...