Debenhams has offered to pay some of its suppliers early after they competed in an auction-style bidding war to offer discounts in return for shorter terms.
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It forms part of an innovative scheme by Debenhams in response to supplier cash flow issues caused by rocketing commodity prices.
Suppliers were asked to submit the highest possible discount they were prepared to offer Debenhams in return for 30 days being shaved off their existing payment terms. Those that offered the greatest discounts were given priority.
Debenhams has ring-fenced a limited pot of money to fund the scheme, which will apply to orders on invoices due to be settled between April 21 and September 30.
The retailer introduced the scheme last month in a letter sent to suppliers from finance director Chris Woodhouse. He wrote that Debenhams had received “a number of requests” from suppliers for early payment of invoices or reduced payment terms.
Normally retailers would impose a prescribed discount of their choosing to reduce terms rather than putting it in the hands of suppliers.
Debenhams is understood to have closed the online auction process but declined to comment on whether it was a success.
Debenhams chief executive Rob Templeman said the initiative was “innovative and supportive of suppliers”.