Several high street retailers have extended their supplier payment terms in a bid to safeguard their businesses against the ongoing coronavirus crisis, putting pressure on manufacturers.
Monsoon Accessorize: Monsoon Accessorize has extended its supplier payment terms from 90 days to 120 days for goods received into its warehouse “with immediate effect on all due invoices”.
The retailer is expected to start closing stores temporarily from today, Drapers understands.
In an email to suppliers, seen by Drapers, the retailer said: ”Global retail is facing unprecedented times with the coronavirus outbreak. We have already experienced a dramatic reduction in customer demand as well as significant store closures. At this critical time, we need your support as we weather this storm together. Our current priority is to protect the long-term future of Monsoon Accessorize for the benefit of our employees, suppliers and customers.
”In our 45-year history, we have never not paid suppliers. We are a business with no debt and have been investing in our future with a successful new store design in Accessorize, and a new web platform for Monsoon and Accessorize. We look forward to reaping the rewards of these investments with you once this crisis is over. To get through this we require your support to ensure that we can manage cashflow during this time [of] store closures.”
The retailer also referenced previous discussions with suppliers “to discuss stock re-phasing and cancellations”. It is not currently known what form these emergency stock measures are taking.
Monsoon Accessorize declined to comment.
Debenhams: Debenhams has extended its supplier payment terms by 30 days to mitigate the ongoing impact of coronavirus on cash flow.
The department store has told suppliers of the immediate changes in an email from chief executive Stefaan Vansteenkiste, seen by Drapers.
It will apply to all suppliers except those which were already on extended terms.
Vansteenkiste said: ”I know these are difficult measures for everyone and we do not take this decision to extend the payment terms lightly. This decision is crucial to make sure we can ultimately pay the outstanding payables balances we have with you.”
The email also details other measures being taken by Debenhams to ensure it “pulls through this difficult period”.
These include engaging with the government to obtain relief on business rates and taxes and engaging with landlords and the request for a five-month rent-free period alongside longer-term lease restructuring.
The business is also engaging with lenders to provide “buffer financing to ensure liquidity” and is continuing to review costs and all non-essential spending.
The email notes that despite having already reduced store trading hours the department store may have to temporarily close some stores, “assuming the government does not demand the closure of all non-essential retail outlets”.
Debenhams declined to comment.
M&Co: Value retailer M&Co has extended its payment terms for suppliers to 120 days, as a necessity to “safeguard the long term viability” of the business through the coronavirus crisis.
The extension will take immediate effect on payments due, as of today, and will be reviewed in six months time, Drapers understands.
In a letter to suppliers, seen by Drapers, the retailer said: ”The decision to take these steps has not been taken lightly, but [we] believe it is absolutely necessary to safeguard the long term viability of our business. It pains [us] to be making this request and [we] would not take these measures unless they were absolutely necessary to ensure the future trading and success of the business.
”[We are] not underestimating the impact this will have for your own business and [we] hope that you will value the strong open working relationship we have shared in the past, as well as our good payment history, as we face into this financial crisis. We are taking significant measures to protect the business and to weather the storm during this period. We sincerely hope that with your help and cooperation we will come through this unprecedented time of uncertainty and we look forward to continuing our partnership into the future.”
In the letter M&Co noted it has already seen a “catastrophic 70% sales reduction”, and expects “many if not all stores to close due to lockdown over the next few weeks for a two week period at least”.
It has closed down its London office, as a precaution following a suspected case of coronavirus. It’s stores and distribution centre remain open. This is being reviewed on a day-by-day basis.