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Suppliers remain undecided over M&S refurb payments

Marks & Spencer suppliers are split over whether they will agree to pay a contribution towards the retailer’s store refit programme, despite some hoping that collective action will prompt the retailer to withdraw.

In October, it emerged that M&S held a meeting with its suppliers asking them to pay a one-off 1.25% retrospective fee from their M&S revenues in the year to August, to help fund its £600m store refurbishment plans. However, a number of key M&S suppliers are still undecided whether to pay up or not.

According to one supplier, the decision on whether or not to pay depends on how crucial M&S’s business is to a supplier.

“For some suppliers, M&S is their only customer and so I’d have thought they would have no choice but to pay,” he said. “For other people, M&S is just one of many customers so they will need to weigh up how important it is to them and whether they can afford not to.”

Some suppliers have been receptive to M&S’s request, with one saying it was up to suppliers and retailers to work together in the current economic climate.

“We are fully supportive of the request,” he said. “It is tough for us at the moment but we understand that it is tough for retailers too. If we don’t help out our retail partners in the bad years, we can’t expect to benefit from them in the good years.”

Another supplier added that while it would be a “stretch”, his business would make the necessary changes to co-operate. “Ultimately it will be a positive thing,” he said.

M&S declined to comment but reiterated its October statement: “We’ve set out a very 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 that journey from the start.”

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

The first revamped store was unveiled on London’s Kensington High Street in September.

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