Houthi attacks on ships in the Red Sea could hit Next's sales, clothes seller's CEO warns

By Louis Goss

Next PLC (UK:NXT) has warned that continued attacks by Houthis on cargo ships in the Red Sea risk disrupting its supply chains and delaying deliveries to the U.K. by up to two-and-a-half weeks.

In a trading update, the British clothes seller warned that attacks by Yemeni militants on ships traveling through the vital shipping lane that leads to the Suez canal risk delaying deliveries of its clothes.

"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," the company said in a trading update.

Next CEO Lord Wolfson later told the PA news agency that continued attacks could delay deliveries to the UK by "two to two-and-a-half weeks." The company chief said these delays could in turn impact Next's sales.

"It will impact on sales if this persists for a long time, but not dramatic levels," Lord Wolfson added.

The Houthis, a Shia political group who control much of Yemen, first started attacking container ships in November after announcing plans to target any Israel-linked vessels traveling through the Red Sea in response to Israel's attacks on Gaza.

In December, the Houthis vowed to block navigation of any ships traveling to Israel and declared that any vessel headed to an Israeli port would be a legitimate target for its military.

Major shipping companies including Maersk (DK:MAERSK.B), CMA CGM, Mediterranean Shipping Company (MSC) and Hapag-Lloyd (XE:HLAG) have halted travel through the Red Sea in response, and instead re-routed their ships to travel around the Cape of Good Hope in South Africa.

U.S. forces have now begun attacking Houthi vessels, in clashes that have seen three of the Yemeni group's ships sunk and led to the deaths of 10 of its fighters.

See also: U.S. warns Houthis to stop targeting Red Sea vessels or face potential attacks

-Louis Goss

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01-04-24 1036ET

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