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Exclusive: Debenhams defers concession payments

Debenhams is deferring all historic concession balances for 30 days, in a bid to mitigate the government’s “mandated” shut down of its store estate. 

A letter sent to suppliers by Debenhams CEO Stefaan Vansteenkiste, and seen by Drapers, reads: “I appreciate that you may have been expecting to receive payment from Debenhams Retail Ltd. I just wanted to advise you that, consistent with our other suppliers outstanding, we are deferring all historic concession balances for 30 days.

“I do regret this, but it is a necessary measure to mitigate the government-mandated shut down of our store estate and consequential loss of our trading income, save for online trading which I say a bit more on below. These circumstances are unprecedented.”

On 20 March Debenhams extended its payment terms to wholesale suppliers by 30 days to mitigate the ongoing impact of coronavirus on cash flow. Since the coronavirus outbreak, retailers including Oasis and Warehouse GroupUrban Outfitters and Arcadia have written to suppliers to delay payments.

Meanwhile, the letter also states that Debenhams has “managed to maintain” its online channel, and it intends to continue to run this “unless circumstances make that impossible.” 

Many retailers and pureplay etailers are still running their online operations, among them H&MAsosBoohoo Group, Little Mistress Group, Arcadia Group, Joules and White Stuff.

However several retailers, including River IslandNextNet-a-Porter, TK Maxx and Moss Bros, are closing their online operations, warehouses and distribution operations, to help protect workers against the coronavirus.

Debenhams declined to comment. 



Readers' comments (3)

  • Of course Debs will be looking for any opportunity to save cash. This is one company that surely should be put out its misery on this occasion and save all concerned a few more years of breadline measures.

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  • The decision by Debenhams to defer payments owed to concessionaires highlights that whilst the concession business model - whether instore or online - can offer brands many advantages, it does come with a price namely that monies resulting from sales made in concessions goes through the store or platform's accounts before it reaches the brand.
    Stephen Sidkin
    Fashion Law Group
    Fox Williams LLP

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  • 30 + 120 = 160 ?

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