Debenhams has demanded a 2.5% discount from its suppliers to “support its ongoing investment” in the business.
The department store sent an email to own-brand suppliers last night asking for the cut citing its investment in its £25m Oxford Street flagship and it opening new shops as providing “significant opportunity for suppliers to grow their business with Debenhams”.
In a letter to suppliers, Debenhams chief financial officer Simon Herrick wrote: “As we will mutually benefit from the growth of Debenhams we are now seeking a contribution from our suppliers to support our commitment to ongoing investment.”
The money will be deducted from the suppliers’ bank accounts by close of business on Tuesday, according to the Financial Times.
The discount occurs ahead of the key Christmas trading period, after a difficult couple of months for retailers. BRC figures showed footfall on high streets in November was 2.9% lower than a year ago and was “negative across the board” in every UK region.
However, a Debenhams spokesman said the timing of the discount demand was incidental.
He said: “We have asked suppliers for a contribution to support our commitment to ongoing investment in the business. We have grown market share in clothing and non-clothing and are investing for long term growth.”
Debenhams is not alone in squeezing its suppliers for better terms. Earlier this year, Laura Ashley demanded a 10% discount from its suppliers whilst John Lewis asked its supplies for a 5.25% discount on its annual sales.