Peacocks has hit out at suggestions it is in poor financial health after it instituted new payment terms for suppliers.
Peacocks has entered into an agreement with trade finance company Tradewind for supplier payments, whereby it says invoices will be paid within seven to 10 days. Suppliers are currently on various standard terms from 90 days upwards. The Philip Day-owned discount fashion retailer will then pay Tradewind after 130 days.
All suppliers will be obliged to use Tradewind, which charges a 2.25% fee on each invoice for its financing facility. The uniform approach benefits the retailer because of the operational efficiencies it brings.
The retailer will also continue to charge a 5% levy, the proceeds of which are used to ensure suppliers are compliant with ethical and responsible sourcing guidelines.
Peacocks said Tradewind had approached it with the offer, not the other way around, and added that three-quarters of its suppliers already used a similar finance service, with many paying more than 2.25%.
The Sunday Times reported over the weekend that the move raised questions over the retailer’s “financial health”, speculation which Peacocks rejected. The retailer added that it had secured the fabvourable terms because of its triple-A credit rating.
A Peacocks spokesman said: “The deal we have negotiated with Tradewind means that suppliers are guaranteed to get paid in seven to 10 days, which is quicker than anyone else on the high street and at better rates than they could access elsewhere. The vast majority of our suppliers currently use Tradewind.
“This change also enables us to better unify terms across our business as well as simplify the payment process.”