09 June 2006 | Paul Snell
Fashion retailer New Look has been "named and shamed" for imposing tough payment conditions on its suppliers.
The high-street store is the latest addition to the Forum of Private Business's (FPB) "hall of shame", for telling suppliers it was extending its payment terms to 75 days from 1 July.
The hall of shame makes public the names of companies the FPB believes are mistreating suppliers.
In a letter to suppliers, Alastair Miller, managing director of finance and services at New Look, said the changes were as a result of increased investment in new store space. He added that the changes to payment terms were in the interest of New Look customers.
In a statement, Nick Goulding, chief executive of the FPB, said: "It beggars belief that New Look has the gall to suggest that its expansion plans should be paid for by its suppliers. They can't possibly expect suppliers to foot the bill because the latest consumer fads have caught them cold."
It follows similar criticism of treatment of suppliers by retailers Matalan, Asda, Marks & Spencer and Halfords.
Meanwhile, a recent survey by credit management company Intrum Justitia revealed that in Europe the average time between sending an invoice and it being settled has risen from 58.7 days in 2005 to 59.2 days this year.
The European Payment Risk Index also noted that small and medium-sized enterprises are likely to be hit hardest, because they are more vulnerable to fluctuating cash flow and have a limited number of customers.
In an FPB survey, 60 per cent of members said that late payment caused their growth to be restricted. However, many small businesses do not charge interest on late payers because of the threat of losing business or the difficulty of enforcing the charges.