Home shopping company N Brown has outraged suppliers by demanding a rebate to help fund its “ambitious growth plans”, including international expansion, further store openings and online investment.
The clothing group, whose portfolio includes plus-size womenswear etailer Simply Be, lingerie etailer Figleaves and plus-size menswear retailer High and Mighty, has called suppliers in the past week demanding a 2.5% rebate on turnover from spring 12 until now.
One supplier told Drapers he was planning to refuse N Brown’s demands, saying it could “swing for it”.
A second will also reject the move, saying he would quote the group’s increase in profit and sales as grounds for refusal.
N Brown delivered a 7.1% surge in pre-tax profits to £45m for the six months to August 31, while total group revenue grew 8% to £409.6m as like-for-like sales increased 7.8%.
In its most recent trading update, the business reported a 5.2% rise in total group revenue in the 19 weeks to January 11, 2014, with like-for-like growth of 5.1%.
A spokeswoman for N Brown said: “We are talking to our long-term suppliers about a potential small discount, reflecting our ambitious growth plans for the future, which include heavy investment into international markets, a substantial store opening programme and increase in online activity – all of which will combine to drive higher product sales in a multichannel environment.”
But Alexander Jackman, head of policy at the Forum of Private Businesses, dubbed the move “a plus-size blow” to suppliers.
“Suppliers shouldn’t be targeted for the failures of their customers’ financial management so we will be looking with interest at how N Brown is seeking to justify this,” he said.
N Brown’s approach is one that a number of retailers have adopted in the tough economic climate of recent years. Debenhams was the most recent to be criticised when it called for a 2.5% discount on stock in December as part of a “contribution” to help fund the its expansion plans.