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Debenhams demands better supplier terms

Debenhams has written to suppliers asking for improved payment terms.

The department store group wrote to some of its suppliers last month, demanding that they meet its “minimum standard payment terms” by August 4. The new terms moved the payment timetable from 60 days to 65 days, according to The Daily Telegraph.

Retailers extend payment terms to enable them to have cash in their bank for longer. Payment terms have been moved from around 30 days to up to 90 days over the last decade.

Debenhams declined to confirm the terms it demanded. However, it said that the changes were requested to a “minority” of suppliers so that they could be bought in to line with its other suppliers.

A spokesman said: “A letter has gone to a minority of our suppliers who do not comply with the company’s minimum standard payment terms. Payment terms remain unchanged for the majority of suppliers.”

Like-for-like sales at Debenhams fell by 0.8% over the 12 weeks to May 23, meaning that the department store has taken market share from rivals. It also improved its gross margin by 90 basis points.

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