Monsoon is trialling a pilot scheme to pay suppliers earlier than its agreed 60-day payment terms in return for discounts.
Managing director Matt Hudson told Drapers that he has begun talking to suppliers about receiving discounts in exchange for early payment. “We’re giving suppliers the opportunity to boost their cash flow by paying them earlier,” he said.
Hudson added that Monsoon’s 60-day payment terms have been in place since November 2006, but he declined to comment on the level of discounting proposed and whether it could vary among different suppliers. It is also unclear how long the pilot scheme will last.
One Monsoon supplier welcomed the move but admitted that retailers have the upper hand when negotiating payment terms. “We’d all prefer 30 days and no discount,” he said. “Most suppliers are in a position where beggars can’t be choosers and it’s rare for them not to agree to new terms set by retailers.”
Hudson joined Monsoon in April (Drapers, March 1) from Marks & Spencer, where he was previously trading director for womenswear, lingerie and girlswear.
The Monsoon business was made private last year by chairman and founder Peter Simon, after he offered 424p a share for the 24.5% of the company he and his family did not own.
Monsoon’s total sales for the 17 weeks to September 22 2007 were down by 2%, with like-for-like sales down 9%, compared with a 6% drop last year. UK and international sales suffered similar like-for-like declines.