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14 March 2013 | Anna Reynolds
The Forum of Private Business (FPB) has said suppliers to Debenhams will be “worried sick” after revealing that the department store asked a supplier make a discount on invoices.
According to the FPB, in a letter sent to its linen suppliers last week, the retailer also said it expected the supplier to charge the discount back to factories to make the required savings.
In a statement Debenhams said: “Last week one of our buyers wrote to eleven suppliers of bed linen asking for a small discount on current and future orders, reflecting the strong performance of the product categories they supply, which has meant larger orders for the suppliers in question. It is not unusual for retailers to ask for improved terms when larger orders are being placed. This was an isolated initiative by one buyer, and does not affect any of our suppliers other than the 11 who have been contacted.”
Robert Downes, spokesman for the FPB, said: “Debenhams claim this was a one-off action by a single buyer, but no doubt all their suppliers will now be worried sick that something similar is coming their way in the not too distant future, and who can blame them?
“This isn’t a company with a great track record for looking after suppliers by paying promptly, their standard payment times are 120 days.”
On Monday, it was reported John Lewis had also written to suppliers and said they will now be subject to a rebate of up to 5.25 per cent on annual sales with the retailer.
In a statement the department store said: “John Lewis has recently written to a small number of suppliers to discuss bringing their commercial agreements in line with the rest of our supply base. We create partnerships with our suppliers with the intention of mutual growth and sharing the proceeds. The intention at all times is to develop a long-term business with benefits for our partners and a sustainable growth opportunity for our supply base.
“All commercial agreements are confidential and are discussed and debated individually. As ever, a supplier retains the right to discuss all aspects of their commercial agreement with us and whether it is profitable for them to supply us.”