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The industry should give thought to its suppliers

Tesco and Monsoon. Two fundamentally different businesses. But announcements by each towards the end of February highlight that the difference is getting bigger.

In the wake of the horse meat scandal, Tesco said it would enter into two-year minimum contracts with any supplier that wanted to do so. It accepted that its relationship with its farmers and producers had not been “in the true spirit of partnership”.

Meanwhile, Monsoon is reported to have told suppliers it has upped its payment times from 60 to 90 days and they will be subject to a mandatory 4% invoice discount. And this week, Laura Ashley ‘requested’ a cut in its charges from suppliers.

For sure, the issue was, is and will be in the future one of market power. All businesses have obligations to their stakeholders.

But at a time when many British businesses are demonstrating greater concern for the UK economy (for example, Next’s discussions with a factory in London’s East End about producing some of its products domestically), perhaps Tesco might extend its contract offer to its clothes suppliers in Britain, Monsoon might adapt its creditable Clothes for Life policy to its suppliers, and all involved in UK fashion might give thought to its supply relationships.

  • Stephen Sidkin, Chair of the fashion law group at Fox Williams

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