Debenhams has dismissed accusations that it demanded steep discounts from its suppliers in exchange for early payments.
The Sunday Telegraph said last week that Debenhams had asked for a series of deductions from one of its suppliers, including a 16.7% discount on settlement of payment within 90 days.
It also asked for a deduction for every bar-coded item that had to be scanned, and a further carrier charge related to delivery of goods, according to the report.
Reacting to the news, the Federation of Small Businesses said: “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.
But a spokesperson for Debenhams said it has not changed its terms of business with its suppliers.
“We have a large number of commercially negotiated discounts but these are separate to discussions on payment terms. The two will of course ultimately be contained in any supplier agreement but are not linked or traded off against each other,” the spokesperson added.
“It would be very misleading to make general inferences from any one agreement with a single supplier but it is categorically not Debenhams’ policy to ask for discounts in exchange for payment terms of 90 days. Our average payment days are 60 days. We are proud of our supplier relationships and aim to follow best practice in dealings with them.”