Debenhams has come under new criticism for its treatment of suppliers after it surfaced that the retailer had asked for abrupt discounts for paying small businesses within 90 days, which is double the industry average.
In emails that are seen by reporters, Debenhams asked for a set of discounts from a supplier, including a 16.7 pc discount on its settlement of payment within 90 days, a reduction for every bar-coded item that had to be scanned, and an additional carrier charge related to the delivery of goods.
“To charge small businesses for paying on time is totally immoral, let alone for paying within 90 days which no one can consider prompt,” stated the national chairman of the Federation of Small Businesses, Mike Cherry.
According to the FSB, the industry average for supplier payments is 42 day. This month, the Government installed MP Paul Uppal as its first small business commissioner, who met with the FSB last week to talk about his mandate of tackling “supply chain bullying.”
A spokesperson from Debenhams said that the retailer had not modified its terms with suppliers and stated that its average payment was 60 days. This week, Debenhams is expected to report a 19pc decrease in annual profits to £95.4m as the department store chain calculates the costs of a weaker pound, wage increases, and higher rental bills, while sales could flatline at around £2.9bn.