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Brands nervous about Jones credit risk

Footwear brands have voiced concerns about the increased risk of supplying to Jones Bookmaker, whose credit insurance is due to run out at the end of the month.

The brands said Jones was trading well and could typically be trusted to pay its invoices, but said they were worried about uncertainty around its future credit insurance arrangements and who will buy it from Dutch parent company Macintosh Retail Group.

Drapers revealed in March that Macintosh was seeking a buyer for Jones and its stablemate Brantano UK. In April, it appointed bank BNP Paribas to lead the search. Industry insiders have suggested the businesses are likely to be bought by a private equity firm.

One supplier told Drapers: “The situation is very fragile. Jones has no credit insurance, so we have taken a risk by extending credit to it. A difficulty for any potential buyer is that all the Jones store and warehouse systems are run from Holland. Another factor is that many of the old Jones people have left, so it seems like it is being run by people from Brantano.”

Another supplier said: “Brands are nervous because nobody knows who is going to buy the business. All the buyers I speak to are saying the same: we don’t have any issues with Jones and they’re paying us. But no credit insurance is going to restrict them and it sends up a bit of a flag as no one knows if it’s permanent or temporary.”

Macintosh managing director David Short assured Drapers the business made all suppliers aware of the withdrawal of credit insurance several months ago and there have been no interruptions to the supply of products: “We have been fully transparent with our suppliers, we have paid them on time and in return they have been very supportive.”

“Our business structure is designed to ensure that Brantano and Jones are run as separate brands with separate commercial teams protecting their very individual DNA.”

Readers' comments (5)

  • david short

    The problem I have with articles like this is the level of inaccuracy aligned to the comments from the anonymous supplier who clearly has no idea about the strategy or operational structure of our business. Frankly I can only describe it as irresponsible reporting.
    It may have helped if Drapers had actually tried to speak to me directly before publishing their article.

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  • Drapers Fashion

    Hi David,

    We spoke to several suppliers who separately expressed concerns about the issues mentioned, and have quoted three above. We believe our story reflects feelings among your supplier base. We called the Jones press office, head office and some of your buyers several times throughout yesterday and again this morning (Wednesday), but did not receive a response. We will update the story as soon as we do.

    Many thanks,

    Kirsty McGregor
    News Editor at Drapers

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  • david short

    Hi Kirsty,
    My problem is the inaccuracy of the comments made in the quotes from anonymous 'suppliers'. If they are prepared to stand behind their comments then they should be brave enough to be named as a source.
    If not, then my view is that Drapers should make much greater effort to seek a response to the comments from a senior member of our management team before they are published. No-one attempted to contact me or any other Director of the business at any time in the last 36 hours.
    Consequently you have a story, riddled with factual errors and opinions from unnamed sources...

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  • Eric Musgrave

    David, You are totally wrong to say that our story is "riddled with factual errors". I worked on this story myself and I am confident that our piece correctly and accurately reflects the feeling in the footwear industry and among your suppliers about the unfortunate state Jones finds itself in due to the difficulties of your parent company in the Netherlands.
    It is quite understandable that suppliers do not wish to put their name to comments. I spoke to one of the suppliers myself and it is an accurate representation of the person's view.
    I sit next to reporter Luke Todd and I know he contacted your company several times about the story and got no response. When you did get finally get in touch after the item went online, we amended the piece slightly to reflect your comments.
    Eric Musgrave, editorial director, Drapers

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  • Ultimately suppliers have every reason to be nervous in a situation where credit insurance may disappear. Similarly in the case of BHS where in the same issue of Drapers you report that “one supplier [had seen] no movement yet from credit insurers”.

    For credit insurers the issue is one of risk assessment – what can they charge to take on the risk and what will it cost to reinsure the risk. And unsurprisingly credit insurers are in broad terms risk averse.

    For brands supplying retailers where credit insurance may not exist there is no magic answer beyond:
    1. an effective retention of title clause in the sale contract; or
    2. money up front; or
    3. reaching for your lucky rabbit’s paw or similar comfort blanket.

    Stephen Sidkin
    Fashion Law Group
    Fox Williams LLP

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