MAGGIE PAGANO: Next boss Lord Wolfson strikes again

Lord Wolfson of Aspley Guise has done it again. The Next boss has over-delivered with results for the Christmas trading period, having under-promised.

It’s a brilliant ruse from the Wolfson playbook which seems to work every time: be ultra-cautious and then please on the upside.

More promising was that Wolfson says trading in the full year, which ends this month, doesn’t look too bad despite the bleak economic outlook, and has revised guidance upwards by £20million to £860million.

Cautious outlook: Lord Wolfson reckons Next price rises will peak at 8% this spring, falling to 6% in the autumn as freight costs and factory gate prices continue to drop

Yet he remains cautious for the year to January 2024, suggesting that sales and profit will be down even though he predicts much lower inflation by then.

Indeed, Wolfson reckons Next price rises will peak at 8 per cent this spring, falling to 6 per cent in the autumn as freight costs and factory gate prices continue to drop.

Lower cost pressures will also help Next hold on to margins this autumn rather than just cover costs, which had been the fear.

So is this caution another of Wolfson’s tricks? That trading is not going to be too miserly after all?

No, he’s too smart to be snookered by his super-caution as he also points out that current guidance is almost exactly in line with that given last January, one that was considered by many to be overly cautious but is now proven to be realistic.

To be clear, he adds: ‘We mention this only because we are concerned some might look at our forecast for 2023 and again assume we are being over-cautious.’

It’s worth noting his careful wording and attention to detail, one of the hallmarks of his extraordinary success in turning Next into the UK’s biggest fashion and home retailer and the High Street’s star turn.

It’s also why, against the odds, Next has been able to stay ahead of the game despite the cost of living crisis which has seen so many customers move to cheaper brands.

Even though prices may be slightly higher than elsewhere, they know they get value for money at Next. It’s a similar story at Greggs, B&M and Boots, which have also reported strong year-end sales.

Adding new brands such as Reiss and Victoria’s Secret to the online platform has also been a game-changer although its bricks and mortar shops – particularly on retail parks – have also done well.

It just shows that a well-run business can be a winner even as the High Street saw 47 shops on average shut every day last year; a total of 17,145 shops over the year.

Investors certainly liked Wolfson’s message, with the shares shooting up to 6518p. Some analysts have a 7500p target.

Those critics who accused Next of nepotism when the board appointed Wolfson, son of former chairman David Wolfson, as chief executive some 21 years ago when it was a shadow of what it is today must be eating their heart out. 

He has more than proved that it takes more than good DNA to run a great business.

Cutting down Amazon

The popping of the tech bubble across the Atlantic gets louder by the day. Amazon is the latest to axe 18,000 jobs, many more than had been announced late last year but still only a fraction of its 1.5m workforce.

No division is safe: jobs will be cut in the retail division, human resources, the Alexa virtual assistant, the Luna cloud gaming platform and Lab 126, the operation behind the Kindle e-reader.

Future projects such as the personal delivery robot have been binned. There is a ban on hiring staff while the expansion of warehouses is kaput for now.

There will be job losses in the UK and Europe too as the craze for online shopping drops sharply from lockdown levels.

Once the disruptor – and the pandemic saviour for so many – Amazon is being disrupted. It must be worried: over the last year the shares have halved and this week it took out an unsecured $8billion (£6.7billion) loan.

Rumours of Jeff Bezos’s return as chief executive are buzzing. Bezos built Amazon on the credo that it knows what a customer wants before they know it themselves.

He needs to do so again.

Wooing Stratford

Thank goodness for that! Sir Keir Starmer’s Stratford speech was so much brighter than his usual wooden performances.

It was also rather cute: name-checking so many industries across the regions – from cyber in Wales to life sciences in Glasgow – was an obvious ploy in his wooing of the business community. 

Whether more come out for him as donors is another matter.