Sir Philip Green’s Arcadia Group has written to suppliers to inform them that it will be cancelling all orders and extending payment terms, in a bid to protect the business during the coronavirus outbreak.
The letters, sent to suppliers on 27 March and seen by Drapers, state that all orders will be cancelled until further notice, and payment terms will be extended by 30 days, with immediate effect. The standard terms will therefore be 90 days.
“Global retailing is facing unprecedented times with the impacts of Covid-19 unfolding and changing daily”, the letters read. “As many of you will be aware, following UK government intervention, we were forced to close our stores last week to safeguard the welfare of our employees, customers and communities.
“You will appreciate that this has significantly hindered our ability to make use of any goods supplied by you and has dramatically reduced the revenue coming into our business. As a result, we need to take action wherever possible with each of our stakeholders to preserve the future of the Arcadia business for the benefit of our employees, suppliers and customers.”
“We have worked with our loyal supplier base for many years and value our relationships enormously”, the letters add. “This is not a decision we have taken lightly and we do not underestimate the impact this will have for you and your business. We thank you for your understanding and cooperation at this very difficult time.”
Arcadia Group declined to comment.