Debenhams has hit back at accusations that it demanded “immoral” discounts from its suppliers, following reports over the weekend.
The department store business allegedly wrote to suppliers insisting on deductions when it pays small businesses within 90 days – double the industry average.
According to The Sunday Telegraph, Debenhams demanded a 16.7% discount on settlement of payment within 90 days from one supplier, as well as a deduction for every barcoded product that required scanning and a carrier charge for deliveries.
But the retailer, which reports its full-year results this week, insisted it had not changed its terms of business with suppliers and said it was “very misleading to make general inferences from any one agreement with a single supplier”.
A Debenhams spokesman said: “Debenhams 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.
“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.”
Debenhams hit back after national chairman of the Federation of Small Businesses said it was “totally immoral” to charge small business for paying them on time.
The retailer is expected to post a 19% drop in full-year profit to £95.4m when it updates the market on Thursday.