Debenhams accused of poor payment practice

The Federation of Small Businesses has criticised Debenhams after it emerged that the retail chain has asked suppliers for discounts in the run up to Christmas.

Debenhams requested a reduction of 1-2% in suppliers’ prices in exchange for making payments 30 to 60 days earlier, according to a letter seen by the Sunday Telegraph.

This is the second time in three years that the retailer has proposed changes to suppliers’ terms over the festive period.

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In 2013, Debenhams demanded its suppliers accept a 2.5% discount on goods just seven days before Christmas.

The FSB has accused the department store chain of poor payment practice, reports the Guardian.

FSB national policy director Mike Cherry commented: “We are concerned and disappointed by this latest example of poor payment practices from Debenhams.

“Sadly it is not the first time we have seen the retail giant behave in this way and would have hoped that by now, it would have improved its behaviour.

“It is simply unacceptable for any company to exploit its market position to enforce unfair and unreasonable payment terms,” he said.

Debenhams said it was asking for small discounts in response to requests from some suppliers for earlier payments.

“The scheme is entirely optional as was made clear in our communication to our suppliers, and is intended to help their cash flow at peak periods,” a spokesperson said.



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