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Exclusive: New Look delays payments 'indefinitely'

New Look has written to suppliers to inform them it will be cancelling all orders and pushing back payment terms “indefinitely”, to ease the impact of the coronavirus outbreak. 

A letter from New Look CEO Nigel Oddy, seen by Drapers, says: “Myself and the board request the following measures, with immediate effect: all existing spring/summer orders for which New Look has not taken ownership are cancelled – for example, orders that are in production, in origin or at port but not yet loaded on to a vessel.

“In assessing what is in New Look’s best interests given current circumstances, New Look has concluded that, in this time of great uncertainty, it does not intend to pay you for any costs, including any costs for fabric and raw materials, in connection with any cancelled orders.”

It adds: “Any outstanding payments that are due in connection with orders for which New Look has taken ownership – for example, orders that have been accepted and are in transit, are in our distribution centre, or in our stores – shall be delayed indefinitely until we see an improvement in trading and in our cash position.

“Should you wish to reclaim possession of such orders, we would, of course, be happy to make them available to you for collection at our distribution centre. Again, this is a matter of survival for New Look and is our assessment of the measures that need to be taken at this time of severe market dislocation due to factors outside the control of enterprises, organisations, and individuals.”

Oddy confirmed New Look is addressing all other areas of expenditure within the business in order to minimise the cash impact of the Covid-19 outbreak, such as seeking rent holidays, deferring tax payments, and assessing employee costs and allocation of resources.

A New Look spokeswoman said: “We, like many other retailers, are having to take difficult and necessary actions to try to mitigate the impact the Covid-19 outbreak has on our colleagues and business. Whilst our online sales channels remain open, albeit on a significantly reduced basis, we have regrettably had to inform suppliers that we cannot place new orders until further notice and will be temporarily postponing outstanding supplier payments until the situation improves.

”We have not taken this decision lightly and have only done so out of absolute necessity given the exceptional circumstances we are in. We greatly value our relationships with suppliers and are actively identifying opportunities where they can hold product for use for autumn-winter this year or spring-summer next year.”

Drapers revealed on 23 March that New Look had put a halt on all current and future production, and is offering thousands of employees unpaid leave. 

 

 

Readers' comments (14)

  • We greatly value our relationships with suppliers!!!!!!!!!!

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  • Ha ha Haha, hilarious, basically no planning for AW 20 just check everyone over the cliff. What happens when this comes to an end , who they gonna get their stock from , contrast this to HM and Asos who are at least coming up with a plan. Dumb leadership, a CEO who has no plan just follow the other sheep, just a paid employee in the end #Clueless #PayUp

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  • The response here just seems to be cut all costs to stay afloat and worry about it later. Terrible way to treat suppliers, on the back of the terrible way they have treated landlords and their staff

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  • Who is going to supply these retailers when it's all over?
    Work with people- you will need supply

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  • End of the day it's dead wood for a reason, plain now to see, regardless of articles and spot lot put on management when it comes down to here the default decisions brutally exposed as to how inept the Directors are. End of day Darwin effect is now about to unfold, survival of the fittest and cleverest, guess what NL wont be one of them, the retailers etailers left are going to be the ones with the best foresite who are looking round the bend , these guys really reap the benefit of what they are sowing.

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  • As a supplier to much of the high street and many brands one of our main challenges over the past few years has been keeping our house in order to meet the SUSTAINABILITY demands placed on us by all by the retailers. interesting to now see that the mediocre and badly run retailers fail at the first SUSTAINABLE hurdle. Let us hope that suppliers do due diligence on the retailers and their MANAGEMENT before re engaging

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  • there must be some legal recourse against retailers who have issued purchase orders and then cancel? similarly can they legally extend payment terms which have been agreed on the PO which is in effect a contract ?

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  • Led by the same individual who crucified the suppliers under HOF, now heading up a second sinking ship and guess who’s money is again being used simply to stay alive? -for now! When this is over so will be the days of supplier credit! Suppliers who survive this will demand deposits on orders or proforma payments for goods supplied. Hats off and full credit to the likes of Zalando and ASOS who are working proactively and honourably with their suppliers to ensure their supply partners at least have a chance of seeing this through. They at least understand the importance of partnership. Two future thinking companies that deserve to be the future and who will suck up the market share left by these failing dinosaurs!

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  • RIP New Look, Debenhams, House of Fraser.......can JLP haul themselves out of this mess..?

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  • If you can't pay your creditors then you call in the administrators surely?

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