Marks & Spencer suppliers will now have to wait up to 11 weeks for payments, as the high street chain revamps its operational policies.
Stating the move is "in line with industry standards," M&S will require brands in the UK and abroad to wait 75 days after the receipt of an invoice for payment.
The store, which previously took 60 days to send payments, expects to create tens of millions of pounds in cash flow from the move, which may help it cope with declining sales.
Suppliers wishing to avoid the increased waiting time may be able to receive immediate payment in exchange for providing a large discount to M&S. The extended wait time also puts M&S behind the competition in terms of compensating suppliers. For instance, the wait for payment from Levi’s and Gap is a month less than that of M&S.
However, other retailers have been known to take even longer than M&S to pay suppliers, with Debenhams requiring a wait of 120 days and Tesco and Monsoon taking 90 days.
Speaking about the decision, John Allan, national chairman of the Federation of Small Businesses, described it as a "financial blow for many small businesses" that is "deeply disappointing."