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Exclusive: JD Williams squeezes suppliers for discount

Womenswear business JD Williams is asking suppliers for an additional 2.5% retrospective discount on orders, to counteract the cost of in-season Sales, Drapers can reveal. 

JD Williams spring 16

JD Williams spring 16

The retailer is asking suppliers for a discount on orders as a contribution towards its “targeted promotional activity”.

A statement from parent company N Brown issued to Drapers said: “We have been successful in driving sales through targeted promotional activity and this success means that we are able to keep drawing good levels of volume from our suppliers, but it obviously comes at a cost, and it is only appropriate that this is shared between us.”

It continued: “We have good relationships with our supplier base, many of which go back a good number of years. As you would expect, we review terms with them periodically to ensure that they are working for both sides in the context of the overall market environment.”

N Brown’s group revenue dipped by 0.2% year on year for the 13 weeks to May 28, as a 3.4% increase in financial services revenue failed to offset a decline in product revenue of 1.6%.

Some suppliers reacted angrily. Those Drapers spoke to describe the request as “a joke” and said it would have serious implications on smaller manufacturers.

One said: “It’s disgusting, we can’t change our contracts or terms – a contract is a contract. We are a small business, so it is going to hit us hard. I might have to make redundancies because of it. They are a really good company and we are growing with them but we can’t stand for these bully tactics. Suppliers need to stand together on issues like this.”

Another of the retailer’s suppliers echoed this: “It doesn’t surprise me and it’s a joke that they can get away with it. It just shows how tough the high street is and typically it’s the supplier who feels the pain. There’s nothing we can do about it, as if you refuse, you will lose the business. The weather has been awful but everyone has had the same problem – it’s how you manage that matters.”

JD Williams is just the latest company to squeeze suppliers to cover costs.

In August Arcadia demanded an additional 2% discount on all orders across all fascias to help pay for a £100m investment in its systems, head office and logistics.

In November Debenhams has been criticised for “moving the goalposts” by asking suppliers for a discount in the run-up to Christmas for the second time in three years.

 

 

Readers' comments (3)

  • Not exactly a new tactic. Just means suppliers will add discounts into future orders. #falseeconomy

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  • So they decide to drive more sales by discounting their products and then after the fact decide to go back to the suppliers and say we want you to pay for it. Your decision to cut your margin, your hit to take!

    This holding suppliers to ransom is just a joke and after the Tesco scenario last year you would have thought something would have changed, it seems not. When will they stop chasing worthless sales and start concentrating on margin, their own margin, and stop eroding those of their suppliers.

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  • Easy way to sort this out. The suppliers say 'no'. Then what will J.D do?

    The only reason the likes of J.D pull stunts such as this is because they can. They know the suppliers will bottle it and give in.

    Time for a change. Suppliers should not take the brunt of others failures.

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