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Forum of Private Business attacks Debenhams for demanding discounts from suppliers

A second high street retailer has been criticised by the Forum of Private Business after squeezing suppliers on terms.

Debenhams, which last week issued a profit warning, has asked linen suppliers to offer a greater discount on products, and moved payment terms from 90 days to 120 days.

Forum spokesman Robert Downes said the move was “not only deplorable but lacks ethics”.

“This is another disgusting example of big business asking suppliers to take a hit for their short term gain, and in this case they’ve even suggested suppliers pass on costs themselves to factories. The ethics of this really should raise eyebrows,” he said.

“Debenhams claim this was a one off action by a single buyer, but no doubt all their suppliers will now be worried sick that something similar is coming their way in the not too distant future, and who can blame them?

Last month the Forum placed Monsoon Accessorize into its “hall of shame” for introducing an invoice discounting scheme to its suppliers.

Downes said Debenhams would not receive the same treatment because the retailer had not increased payment terms for more than five years.

However, he noted that the Forum would “continue to publicly name and shame” businesses who squeeze suppliers on terms, describing it as “unacceptable bullying of small firms”.

A spokesman for Debenhams insisted there had been no change to Debenhams’ policy on supplier terms”.

He added: “Last week one of our buyers wrote to 11 suppliers of bed linen asking for a small discount on current and future orders, reflecting the strong performance of the product categories they supply, which has meant larger orders for the suppliers in question.

“It is not unusual for retailers to ask for improved terms when larger orders are being placed. This was an isolated initiative by one buyer. It does not affect any of our suppliers other than the eleven who have been contacted, and does not affect any fashion suppliers whatsoever.

“Since 2007 our standard terms have been 120 days. There has been no change to that policy, but where suppliers have not been on these standard terms, we have been gradually moving them onto them.”

Readers' comments (1)

  • 120 days is obscene, but this has happened because Debenhams suppliers have created this situation by allowing the store to dictate terms when it should be the other way around. It's the tail wagging the dog!

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