Next, one of the largest fashion retailers in the UK, has issued its second warning to the government regarding tax increases, emphasizing that this action could disrupt economic growth. The company, which has been managed by Lord Wolfson since 2001, has raised its profit forecast for the fourth time this financial year.
Warning about the consequences of new taxes
In his recent remarks, Lord Wolfson stated that any tax increase in the budget on October 28 could lead to a decrease in consumer confidence. He added: "The tax burden is at its highest level in over 60 years, and it seems that any further increase will only lead to disruption in economic growth. This is a vicious cycle that could worsen the government's financial situation."
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Additionally, Richard Walker, CEO of the frozen food chain Iceland, has urged Andy Burnham not to consider businesses as a "savings bank." He opposes any tax increase on the business sector, believing that this action would harm the economy.
New forecasts and existing challenges
Next has forecasted that its sales growth in the UK will decrease by 2 percent in the second half of the year, while the previous forecast was 2.8 percent. However, Wolfson has referred to the gradual decline in sales as a challenge, stating that this decrease will be "slow and steady."
These warnings come as some of Next's competitors, including John Lewis and Fraser, have also called for no tax rate increases to reduce sales tax burdens. Furthermore, Lord Wolfson has pointed out that men's essentials sales at Next need improvement, and this sector could represent the biggest opportunity for the future.
In the first half of this year, Next's pre-tax profit rose to £569 million, reflecting a 10.5 percent growth. The company now predicts that annual profit will reach £1.23 billion, which is a 7.3 percent increase from the previous forecast. With a 3.6 percent growth in full-price sales, Next has managed to partially offset the decline in store sales.
Moreover, Wolfson believes that consumers have a greater preference for the "real creativity of humans" compared to designs produced by artificial intelligence, and accordingly, he will place more emphasis on the use of human artistic techniques.
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