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Exclusive: Arcadia cancels orders and extends supplier payments

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.”

Since the coronavirus outbreak, retailers including Primark, Edinburgh Woollen Mill Group (EWM) and New Look have also written to suppliers to cancel orders until further notice. 

Arcadia Group declined to comment. 

 

Readers' comments (6)

  • What happens if you say no, need to be paid in 60 as agreed ?

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  • How about Sir Philip Greed putting his hands in his very deep pockets.

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  • I understand retailers who were already operating in a weak market may feel forced into this action . However, I am not sure how many suppliers will be left when the shops reopen !

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  • It makes me angry when suppliers get told to be ethical and make sure we’re looking after our staff ( which we do always ) but the high street stores think it’s ok to change the terms or take discounts whenever they like ! What’s ethical about that ?

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  • Does no one else feel that this is totally immoral?
    Why would suppliers want to take all the risk for so little gain?
    When other companies are working with their suppliers to ensure that they both survive this Covid-19 crisis, Arcadia seems hell bent on only looking after itself

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  • Does no one else feel that this is totally immoral?
    When other companies are working with their suppliers to ensure that they both survive this Covid-19 crisis, Arcadia seems hell bent on only looking after itself

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