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Supply rethink at MK One as losses continue to rise

Value retailer MK One has kicked off a review of its suppliers after losses at the chain sunk to £21.4 million for the year to January 27.

Chief executive Dominic Galvin said that a lot of MK One's supplier terms and conditions were "out of line with the competition". All of MK One's suppliers are understood to be on different contracts with the retailer, which has also prompted the overhaul.

Galvin added: "We are taking a look at discounts, payment times and even supplier performance. There may be a number of casualties over the next few weeks as a result."

Rival retailers including Matalan, Bay Trading and Oasis have all tightened the screws on suppliers in the past year.

Bay Trading doubled its payment terms from 30 to 60 days, while Oasis' terms were extended from 28 days to 45 days. New Look and Arcadia also extended their terms from 60 to 90 days last year.

Despite posting a huge loss for last year, MK One has started to recover but not before owner Baugur pumped in £15 million of cash to aid recovery. Like-for-like sales for the first 20 weeks of this year were up 10.3%.

Galvin has focused on reducing lead times, increasing fashionability, lowering prices and refurbishing stores as part of his turnaround plan.

By the end of September, 60 stores will have been refurbished and Galvin said they were outperforming existing stores significantly.

MK One's branding has also been overhauled by design agency The Bureaux for autumn.

The retailer has appointed Patricia Becquereau from Mexx as head of buying. She will report to MK One buying director Suet Cheung.

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