Next PLC (LSE:NXT) has warned that shipping delays arising from attacks in the Red Sea will affect stock levels in the weeks to come.
The group, which pleased the City by raising its profit guidance today, nonetheless disclosed in the interim report that “difficulties with access to the Suez Canal, if they continue, are likely to cause some delays to stock deliveries in the early part of the year”.
In a following Bloomberg interview, Next boss Simon Wolfson said he was “banking on it affecting most of our stock… The longer it goes on, the more problems it will cause".
Houthi rebels, allegedly backed by the Iranian government, have been attacking commercial ships in the Red Sea, reportedly in protest of Israel’s latest assault on the Gaza Strip, Palestine.
The attacks in the Red Sea are centred on the Bab al-Mandab strait, through which nearly 15% of global trade passes.
According to the International Chamber of Shipping, 20% of the world's container ships are choosing a much longer route around South Africa to avoid pirates.
Container shipping rates have soared 173% due to these Red Sea diversions, according to cargo booking and payment platform Freightos.com.
Wolfson’s warnings weren’t enough to hit Next’s share price though, which is up 4% today after the Leicester-based group announced that full-price sales were up 5.7% compared to the year before, or £38 million above previous guidance.