By James Davey
LONDON (Reuters) - Disruption to shipments in the Red Sea will not prompt British clothing retailer Next into a major re-think on where it sources its products, its boss said on Thursday.
Next, which sources the majority of its products from Asia, had cautioned in January that sales growth would likely moderate if disruption to shipments through the Suez Canal, due to attacks by Iran-aligned Yemeni Houthi militants in the Red Sea, continued through 2024.
On Thursday it said that although transit times had increased by seven to ten days as shipments are diverted around Africa's southern Cape of Good Hope, it did not expect a material financial impact.
"The thing that really drives where we place product is the capabilities and value for money that we get from suppliers," CEO Simon Wolfson told reporters at an annual results media briefing.
"It would be a mistake to try and position it for geo-political reasons," he said.
Wolfson said adding seven to ten days to lead times "isn't make or break for the manufacturing base, it's not a reason not to go to the Far East, you've just got to place the order seven to ten days earlier."
Next was looking at sourcing opportunities closer to the UK, North Africa in particular, "but it wouldn't be the Red Sea that was driving that, it would be finding great product there."
He noted that Next used to have a significant sourcing business in Portugal and North Africa which had diminished over the last 15 years. It still has a supply base in Turkey.
Wolfson said it was wrong to assume the supply base was managed from the Next boardroom, rather it was dictated by individual buyers and quality assurers.
"They're the ones who decide where we buy the product and that process is driven bottom-up from them looking at different factories, travelling the world and looking for the best sources of supply."