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Debenhams asks suppliers for bill discounts

Debenhams has asked suppliers for a reduction in bills for the second time in three years in the run-up to Christmas.

Debenhams

Debenhams offers suppliers early settlement for a discount

Debenhams

The department store chain has contacted suppliers asking for a 1% to 2% discount in exchange for paying them 30 or 60 days earlier than current terms.

The optional shorter payment terms will last from November 24 to May 26 next year, and come into effect today.

“In response to requests from some of our suppliers we have this year offered earlier settlement of invoices in return for a small discount,” said a spokeswoman for Debenhams.

”The scheme is entirely optional as was made clear in our communication to our suppliers, and is intended to help their cashflow at peak periods. ‎The offer has been welcomed and we continue to maintain strong relationships with our suppliers.”

In December 2013, Debenhams asked suppliers for a 2.5% discount on stock as part of a “contribution” to help fund the retailer’s expansion.

In a letter seen by Drapers at the time, Debenhams stated that contributions would be based on each supplier’s business with the retailer in two ways: the first took the form of a single-sum contribution of 2.5% on all outstanding payments on suppliers’ accounts at the end of the day on December 17; it also asked for a discount of 2.5% on all open orders at the end of the day on December 17.

 

Readers' comments (2)

  • This keeps cropping up with Debenhams. Ultimately, as a brand you have a choice - either you accept the terms or walk away. The reason Debenhams behave in this accord is because they know they can because their suppliers cave in. Maybe brands should have a good look at themselves and ask 'Do we still want to be in here?'

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  • Answer, walkaway, i did this years ago when they forced me to go to 120 days, best decision we have ever made.

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