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Supplier fury over retailers’ demands

Jane Norman threatens to axe orders while M&S asks for revamp payments.

Jane Norman and Marks & Spencer have heaped pressure on their suppliers as retailers continue to explore ways of adapting to the tough economic climate.

Concerned suppliers told Drapers that women’s young fashion chain Jane Norman, which was bought out of administration by Edinburgh Woollen Mill in June, had threatened in the past month to cancel existing orders and scale back on others. 

One supplier said the retailer had attempted to cancel a quarter of its orders but had since backed down. “They were going to cancel a quarter of a million pounds worth of goods. I would have had to close down,” he said.

“I am talking about massive amounts of stock which are already on their way here by sea. I don’t know what they are up to but they can’t do this. Suppliers will go out of business.”

Another supplier said Jane Norman had tried to scale back on its orders and had requested that stock be held back.

She said: “It isn’t an ideal situation to be in as a supplier, as we don’t know if they’ll take it and we could lose money. We are lucky because we only have a couple of orders with them, but I know of other people who have more orders and it will hit them harder.”

Another Jane Norman supplier said his business was unaffected.

A spokeswoman for the retailer said it was “gaining clarity and understanding of both the quality and quantity of pipeline stock” and “establishing the number of trading outlets” it is operating during autumn and winter.

“We are realigning intake in line with overall stock volumes and requirements, understanding underlying market conditions and the recent unseasonal weather, and we are working closely with suppliers.” Jane Norman drafted in Emma Benjafield as head of buying last month. It is believed that Benjafield, previously buying manager at Tesco, is responsible for sourcing and product strategy.

Meanwhile, Marks & Spencer asked suppliers at a meeting last Friday to help fund its £600m store refurbishment programme. The retailer held a meeting last Friday with 60 of its suppliers, where it asked for a one-off contribution of 1.25% of their Marks & Spencer revenues in the year to August.

The store refurbishments are part of M&S chief executive Marc Bolland’s change programme, which is intended to better differentiate the retailer’s sub-brands and make stores easier to shop.

One supplier told Drapers she was concerned that she would not be able to afford the extra cost and said the fee could equate to as much as £500,000 for some suppliers.

She said: “Most suppliers only make about 8% overall, so for some this retrospective fee will be almost impossible to agree to.”

However, M&S supplier  Touker Suleyman, who also owns shirt retailer Hawes & Curtis and womenswear brand Ghost, was more upbeat.

“I can understand [why they’re doing it],” he said. “We will get it back. [Suppliers have] got to look at the longer-term view; it’s increased business.”

An M&S spokeswoman said: “We’ve set out a clear strategy to grow our business over the next three years to our mutual benefit. We therefore believe it is right that our top suppliers are part of the journey from the start.”

Readers' comments (1)

  • Suppliers should use a word that the like of M&S et al don't want to hear - NO. Get yourself a water tight contract and get them by the balls. The only reason they put the pressure on, is because they know suppliers cave in to their demands.

    However, as a supplier, you should never have all your eggs in one basket, because you'll be at the mercy of your retailer and they know it. If your business is potentially going to go bust because the retailer puts the squeeze on, then I suggest diversification is the answer. Never set yourself up in a position of weakness, as I fear too many suppliers have...

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