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M&S extends supplier payment terms

Marks & Spencer has extended hundreds of suppliers’ payment terms by 15 days to 75 days.

The retailer told its 500 general merchandise suppliers – of which 75 are based in the UK – that it would be changing terms, bringing the company “in line with industry standards”. The increase will come into effect early next month.

John Dixon, M&S’s executive director for general merchandise, wrote to suppliers informing them of the change.

According to Sky News, Dixon’s letter was sent alongside a separate note outlining the availability of a vendor financing scheme, through which HSBC and Royal Bank of Scotland provide immediate payments to suppliers in exchange for a substantial discount.

An M&S spokeswoman told Sky: “We are always looking at ways to ensure we are running our business efficiently and that it is well set up for the future. As part of this, we are extending our GM supplier payment terms to bring us in line with industry standards.”

Readers' comments (3)

  • Why don't they match the new industry standard payment terms from China-where most of their suppliers goods will come from?
    30% up front!!!
    Just one more example of squeezing their suppliers.

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  • For the few remaining independents out there 75 days would be very nice....the big/small syndrome works both ways.
    Don't know where M&S get there industry norms from.

    By the way, has any other indie noticed that more and more invoices are dated before goods are received and that suppliers are sending out 'reminders' in advance of payments being due.

    'We're all in this together as' the man said.

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  • darren hoggett

    I would agree with the previous poster that 'pre-dating' of invoices to blatantly obtain early payment is still prevalent with some brands in the industry. You have to keep a sharp eye on the culprits!!!

    As for M&S, John Dixon is talking absolute cobblers. Do M&S really expect people to believe all this? It would be nice if all their suppliers said that this criteria is unacceptable and stopped suppling them. What would Dixon do then?

    Industry standard by brands is usually 30-60 days. To suggest that 75 days in the 'norm' is insulting and Drapers should point this out very clearly.

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