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Sector allies draw up survival plans

The news that a group of Principles suppliers have joined forces to create an etail venture (see News) to serve the public direct is more evidence that suppliers are finally grabbing the bull by the horns with innovative new business models that will ensure their survival through the recession.

Last week, supplier Rinku Group bought a significant chunk of value chain Bay Trading out of administration. Supplier Cafer Mahiroglu, who is the subject of the Drapers Interview this week, is also making strides (and margin gains) with his repositioning of value chain Select, which he bought last year.

These are just the sorts of innovative strategies the industry needs to see it through difficult times.

While an unwelcome deeper discount demand from owner Sir Philip Green landed on the mats of several Bhs suppliers this week, it is not an option for suppliers to just pull contracts such as these.

So thinking outside the box is the only solution. Other retailers are adopting softer tactics, realising that administrations and the credit insurance crisis have left many suppliers flailing. “We’ve changed tactics and are working sensibly with our suppliers to ensure they make it through with us,” one such retailer told me recently.

This issue of closer collaboration does not just affect the high street. The branded supply sector is also taking the initiative, striking new and more harmonic agreements with the likes of Republic and USC, while the most proactive brands are working more closely with their lifeblood - indie stockists - to support them for the future. As we come out of the recession, it will undoubtedly be the innovators and collaborators that thrive.

  • Jessica Price Brown Managing editor & news editor

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