Sir Philip Green’s Arcadia Group has offered to accept orders from suppliers that were in transit on 17 March at a 30% discount, to avoid cancelling them entirely.
Last month the group wrote to suppliers to inform them that it would be cancelling all orders and extending payment terms.
In a new letter sent to suppliers, seen by Drapers, the group states that it has a “contractual right” to cancel orders in transit without suppliers’ consent and if it cancels an order in transit, it is “not responsible for any costs including, for example, the costs [they] might incur in recovering [their] goods”.
However, the group has now offered suppliers an ultimatum on orders that were in transit on 17 March. The letter stated: “For any order that is in transit or was in transit on 17 March 2020, we are prepared to bring in the order at a 30% discount. Our teams will be reaching out to you over the next week to see if you want to accept this proposal instead of us cancelling the order. If you do not wish to accept the proposal, the order will be cancelled.”
The group, which comprises Topshop, Dorothy Perkins and Miss Selfridge, among others, has also confirmed that any undisputed invoices, which were due before 17 March 2020 will be settled by the end of next week, 19 April.
The letter also highlighted a legal clause in its trading contracts, which allows the group to cancel any order: “We can ask you to suspend or cancel any delivery or order if we cannot use, or are hindered or prevented from using, the goods because of any cause beyond our control…If we suspend or cancel an order we will not be legally responsible for any direct or indirect damage or loss this may cause you.”
Arcadia has told suppliers that it needed to cancel orders because it is “likely to face serious seasonal challenges – customers will not be willing to buy spring goods out of season”, and it will not be able to bring in any new orders before the inventory in the stores has been sold.
Arcadia Group declined to comment.