Selfridges has emerged as the latest retailer to squeeze its suppliers on terms.
The department store told fashion suppliers late last year it would pay invoices within 60 days only if it receives a 3% settlement. Quicker payment is also available based on larger discounts.
Previously the store had increased payment terms from 60 days to 75. The latest move effectively offers suppliers the opportunity to return to the previous way of working if they give up margin.
Selfridges joins the likes of John Lewis, Debenhams, Monsoon Accessorize and Laura Ashley in toughening supplier terms.
A spokesman for Selfridges explained: “In October last year, Selfridges began to align the conditions of the payment of all its suppliers in line with current industry standards”.
However, Forum of Private Business spokesman Robert Downes said: “This isn’t the first instance we’ve heard of a big retailer asking for an invoice haircut in return for quicker payment, but having first increased their own standard payment times. It’s a slippery way of doing business.
“While we understand the pressures being faced by high street retailers, it seems neither fair or right that they are asking suppliers to take a big hit in this way, especially without any meaningful discussion beforehand.
“While some suppliers may be in a position to agree the deal, others won’t, and then it’s a stark choice of waiting longer for their cash, or getting it quicker but losing a sizeable chunk. It really is a case of putting them between a rock and a hard place.
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