Baugur-owned Aurum Holdings – parent company to retailers Mappin & Webb, Goldsmiths and Watches of Switzerland – has turned the screws on suppliers following the completion of a strategic review.

In a letter seen by Retail Week, from Aurum finance director Steve Sargent, suppliers to the jewellery and luxury goods group were told that, from May 12, merchandise will be paid for after 100 days with a settlement discount of 6 per cent.

Aurum will also skim 5 per cent off suppliers’ turnover with the group for “marketing funding”.

The move mirrors fellow Baugur-backed retailer House of Fraser’s controversial decision last year to alter its supplier terms.

One supplier, whose payment terms are 60 days, told Retail Week that the letter “beggars belief”.

The source added: “Surely this tail-wagging-the-dog thing has gone too far when a jewellery chain thinks it’s so big that it can dictate outrageous terms to its suppliers.”

Another said the increase in contribution towards marketing costs was hurting suppliers who face a challenging trading climate.

Aurum declined to comment on the specific changes, but said it was standardising terms across the three retailers, which were grouped together under Aurum last year.

The strategic review was outlined to suppliers in December, as it appointed Baugur board member and House of Fraser chairman Don McCarthy as Aurum non-executive chairman. The retailer said it wanted to simplify operations and reduce the number of suppliers it trades with this year.

An Aurum spokeswoman said the changes allow it “to do more with less” and permit a “more aligned marketing investment programme to drive the top line”.

She added: “Stores have been upgraded, product groups have been reviewed and our targeted marketing strategy is planned and ready to deliver further sales and customer relationship benefits this year.”

House of Fraser’s renegotiated supplier terms have improved its average debt by about£50 million in the past 12 months and is set to contribute about£10 million to profits in the next year.