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Suppliers squeezed as multiples cut orders

Many multiples are cancelling and cutting down orders with suppliers to recoup the cost of lost sales as patchy weather and tough trade continue to wreak havoc on the high street.

Despite the recent spell of better weather in the UK, footfall on the high street has remained flat - edging up just 0.1% for the week to May 22, according to research firm Springboard.

Suppliers told Drapers this season has been one of the “worst ever” for cancelled stock, as shoppers are reluctant to part with their cash for spring product.

“It has been happening a lot, in fact it is one of the worst seasons for it I’ve ever seen,” said one high street supplier.

“A lot of the big retailers are booking product but because trade is so tough they are cutting [orders] and we are left with the fabric. It’s causing us to have serious cash flow problems and it’s been difficult. It always seems to fall back to the supplier,” he added.

One womenswear supplier agreed: “Everyone is having a really hard time at the moment. Buyers keep cancelling orders and changing their minds on what they want. Trade has been so unpredictable so a lot of them have lost their confidence and they aren’t sure of themselves.

“They need to choose the right product rather than watering it down to save on margin.”

“It is happening all over the high street,” said another young fashion supplier. “You only have to look at the weather and the state of the high street to see why it’s going on. If trade isn’t going well for these big boys they will always find an excuse.

“The difficulty for suppliers is they still need the business so it’s hard to put an end to the relationship if something like this happens.”

Another supplier to high street multiples agreed: “Business is tough so you have to be willing to put up with more than you would like. One retailer we work with, for example, wanted to change the swing tag on an order but didn’t want to pay the excess charge so we had to take it off our bottom line.

“At the end of the day you have to weigh up a couple of grand against the couple of million they spend with us. You often have to support them in the hope they will continue to support you.”

He added: “A lot of suppliers are being hit badly; even for bellwethers like Next it has been tough. Even though the weather has improved it is still hit or miss. One multiple I work with said his like-for-like sales shot through the roof when we had three sunny days together, but the following four days were poor so all the good work was undone.” 

Rachel Lund, head of retail insight and analytics at the British Retail Consortium, said: “The competition in clothing is some of the fiercest on the high street and we have seen significant price deflation. Retailers we have spoken to have put a lot of this down to the weather as a poor spring has delayed seasonal sales and trade has not been as good as they had expected.

“From data for April and the beginning of May we can see a real weakening in footfall and demand from consumers.”

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