Source : Procurement Leaders
UK high street clothing retailer Peacocks, which was recently bought by Edinburgh Woollen Mill, has asked that its suppliers extend its payment terms to 90 days.
The “fast fashion” retailer has been slammed by companies in its supply chain for the move, which comes at a time when small firms are struggling to get credit facilities from their banks.
One retail sector source told the financial news website This is Money that the demand for extended credit puts unsustainable pressure on small companies in the Peacocks supply chain and would effectively mean that only larger suppliers with cash reserves would be able to continue trading with the group.
“You have to be very big or very desperate to accept terms that mean you aren’t going to be paid for three months,” the source said.
The move by Peacocks was read as a sign that it may be moving away from fast fashion suppliers towards a reliance on safer, middlemarket products, according to This is Money.