Karen Millen and Coast suppliers are facing further losses after Boohoo offered to buy just a fraction of stock already produced for the brands’ relaunch in October.
Suppliers have been left with a difficult decision following Boohoo’s acquisition of the online businesses and intellectual property rights of the premium womenswear brands. To relaunch the businesses on 1 October, Boohoo is only offering to buy a quarter of the stock already produced by suppliers.
“They’re now offering to buy stock at 25% of the full volume,” one supplier told Drapers. The etailer offered to buy just 400 pieces of this supplier’s 1,250-piece order of one style, and is currently avoiding three other styles completely.
Suppliers are now faced with a choice to either sell a small proportion of stock to Boohoo, in the hope that they repeat purchase, or to try to sell the styles elsewhere at a lower price, risking losses.
“They say they have a policy that they will buy small in the start and then repeat big, but I’m dubious as to whether that will happen,” the supplier said. “I can’t see from the conversations that I’ve had [with Boohoo] that they’re ever going to buy in a different way – it’s only going to be small and bitty.”
He added that if suppliers choose to walk away with their goods, they will be “lucky to get 60 to 70%” of their full value.
Another Coast supplier facing a similar situation was angry at further losses following the brand’s administration in 2018, when it was bought by Karen Millen: “[Boohoo] are acting without consideration for what suppliers have suffered with Coast. We lost £100,000.
“Several suppliers are complaining that they are taking a small proportion of stuff made for Coast. It’s all well and good to say, ‘We’re going to promise you new business,’ but in this day and age you can’t live on promises.”
A source close to Boohoo said: “They recognise it is a difficult situation to put suppliers in, but have offered to buy more than was originally pencilled in just for online. They hope that is some level of compensation and, as a business, it is well documented that they operate on a successful test and repeat model.”
Boohoo has been contacted for comment.