In a letter seen by Retail Week from Moss Bros finance director Michael Hitchcock, suppliers were told that from October 14 merchandise would be paid for after 90 days, with a settlement discount of 6 per cent.
Moss Bros will also take 1.5 per cent from suppliers’ turnover for a “marketing contribution”. The move mirrors the strategy taken by fellow Baugur-backed retailers Aurum in May and House of Fraser at the end of last year.
Hitchcock said in the letter: “Moss Bros is in the process of completing its three-year strategic plan, which lays out numerous opportunities for all stakeholders, including suppliers.”
He added that the terms and conditions are “in line with its peers in fashion retailing”.
Moss Bros’ part of the deal includes “a major awareness strategy”, promoting individual brands in up to 160 stores and online, providing advertising, staff incentives and visual merchandising guidance.
“This ultimately comes at a cost, which we want the key brands to contribute, but to also share in the upside that we are confident will result,” the letter states.
Suppliers that do not acknowledge receipt of the letter will revert to new terms of 120 credit days with 0 per cent discount.
One supplier told Retail Week that the timing of the changes in the challenging retail environment is “insensitive”. However, Hitchcock told Retail Week the changes to terms and conditions are “good retail practice”.
“You have only got to look at our balance sheet to see it is not a cry for cash,” said Hitchcock. “Suppliers have a key role to play in the retail cycle and under no circumstances would we put them at risk. We don’t want to cut off the hand that feeds us.”
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