Marks & Spencer is pulling away from more of its third-party suppliers in a bid to streamline its processes and cut costs, Drapers understands.
Sources told Drapers M&S is ramping up its strategy to work directly with more factories to counteract rising costs following the devaluation of the pound after the EU referendum.
It is also understood that the latest move away from using third-party suppliers precedes a number of redundancies in the M&S buying teams.
One supplier said: “Lots of suppliers are being culled to make it more efficient and helpful for the smaller buying teams. If they continue to do this there will just be the in-house design team and the factories, with no outside input, so the product will suffer.
“It’s going to have a huge impact on smaller companies like ours. They are making the wrong decision.”
Another source said: “It is a really tough time for suppliers are the moment. They are losing big contracts like M&S and are having to cut staff as a result.”
M&S is currently in consultation with employees in its head office, amid proposals to cut 500 posts. It has not disclosed which roles are affected.
Drapers has been told the buying team will be “significantly” reduced, with cuts being made by category; for example, if there are two buyers for jersey, this will be reduced to one.
Streamlining the buying process by working with fewer third-party suppliers will take pressure off the remaining staff, our sources said.
A spokeswoman for M&S said: “We review our third party suppliers on an ongoing basis but have no current plans to make significant changes.”
In 2014 M&S said it was moving towards direct sourcing and hired brothers Mark and Neal Lindsey as sourcing directors for general merchandise. Both were previously responsible for the growth of Next Sourcing, which streamlined Next’s supply chain to improve speed and efficiency.
In July that year, 80 redundancies were made at Dewhirst after M&S outsourced some of its manufacturing to Bangladesh. It is thought The Fielding Group was also affected.
Last year one of M&S’s biggest suppliers Courtaulds underwent a “restructuring programme” following a reduction in orders from M&S and two other suppliers, London-based Low Profile and tailoring supplier Bagir, made redundancies as a result of the retailer’s move away from direct sourcing.