LONDON – The share price of British high street clothing retailer Next closed up 7.7 percent at 5.52 pounds on Tuesday after its chief executive officer Simon Wolfson hiked the company’s full-year profit forecast and downplayed the impact of a “no-deal Brexit.”
Wolfson, a Conservative and member of the upper house of the British Parliament, has long been in favor of quitting the European Union. In a lengthy statement on Tuesday, his company said that if Britain fails to strike a viable exit deal with the EU, it won’t be an enormous tragedy.
Time is running out for Britain to come to an agreement with the EU, and Prime Minister Theresa May is battling with the opposition – and many members of her own party – about what the terms should be.
With British newspaper headlines dominated by the Brexit debate, and the nation gripped by anxiety about its future, Wolfson’s words offered some comfort to businesses. He said that if Britain crashes out of the EU without any deal, additional duties on goods would add a maximum of 0.5 percent to prices.
He also said that while the U.K.’s departure from the EU without a free trade agreement is not his preferred outcome, Next was prepared for that eventuality and plans to continue with business as usual.
The Next report on the consequences of a no-deal Brexit said that as long as ports and customs procedures are prepared for the change, and tariff rates are adjusted so that customers don’t have to pay any extra duties “we believe we can manage the business to ensure no material cost increases or serious operational impediment.”
Wolfson told the Evening Standard newspaper that the biggest single risk of a no-deal Brexit is that the ports stop working, “and there’s a lot the government can do to reduce the burden of work at ports.”
He also raised the company’s full-year pre-tax profit forecast by 10 million pounds to 727 million pounds. Half-year pre-tax profit was 311 million pounds, broadly flat against last year.