High street fashion tycoon Sir Philip Green has cited speed of the supply chain rather than price as the only way to stay ahead in the current economic climate.
Speaking on BBC Radio Four’s Straight to the Top programme this morning, Sir Philip Green said that customers would be focussed on newness in product, rather than on price this year.
He said: “There is going to be significant inflation. Let’s not delude ourselves. Most expansion has been funded in a simple way, we had India booming, china booming and massive production. There needs to be a correction. It has been a one way bet and that correction is here… Customers want fresh they want new. It’s about speed to market. Speed is more important than price.”
“In this industry you’ve got to be pre-nimble. Forget Strictly Come Dancing, this is permanent dancing, 24/ 7, around the globe.”
Sir Philip Green
He added: “In this industry you’ve got to be pre-nimble. Forget Strictly Come Dancing, this is permanent dancing, 24/ 7, around the globe.”
“Supply chain is everything, we can turn like that on a sixpence. When I visit America they run on 12 weeks stock, I want to run my business on six or seven weeks stock.”
Green, who started his career in a downturn, also had some heartening news for suppliers. “One of our key suppliers came in yesterday and said ‘we’ve got a problem.’”
He added: “[If a supplier has a problem] We’ll fix it. 95% of the problems you can fix,” he said.
”Replacing key suppliers is hard work. There is a two-way street and my car travels both ways.”
However former Topshop managing director Jane Shepherdson, who now runs the womenswear chain Whistles, had a different view. She said: ” I don’t think this year retailer can afford to do that [pass the cost on to customers]. I don’t think customers will be able to afford to pay the extra.”
“The retailer is in a difficult position. We’re paying more yet we can’t pass on that increase on. It involves you being very clever with where you are buying from. The suppliers who are left are eager to get the business so in some cases they will reduce their margins slightly.”
Topshop managing director Mary Homer, who stepped up to the helm when Shepherdson left in 2006, said that Topshop was performing despite the recession. She said: “We are beating our sales plans and are banking week-on-week, hoping for the best, and managing the business accordingly.”
Click here to listen to the full Radio 4 programme via the BBC iPlayer.
Do you agree with the views of Sir Philip Green and Jane Shepherdson? How do you plan to trade through the recession? How important is price versus product? Post your comments in the box below.