Selfridges early payment fees slammed by Forum of Private Business

The luxury department store had informed suppliers that they would forgo 3% of the value of their invoices as a “settlement discount” in return for it paying bills within 60 days.

It has also given suppliers the options of sacrificing 5% of their bill to have it paid within 21 days, or losing 4% in order to receive payment within 30 days.

The Forum of Private Business told Retail Week sister title Drapers that it was “unfair” of Selfridges to boost its own cash flow at the expense of its supply base.

It said: “While we understand the pressures being faced by high street retailers, it seems neither fair nor right that they are asking suppliers to take a big hit in this way, especially without any meaningful discussion beforehand.

“While some suppliers may be in a position to agree the deal, others won’t, and then it’s a stark choice of waiting longer for their cash, or getting it quicker but losing a sizeable chunk. It really is a case of putting them between a rock and a hard place.”

A spokesman for Selfridges said that the changes were made in October last year “to align the conditions of the payment of all its suppliers with current industry standards”.

It had previously settled invoices within around 75 days.

Selfridges is the latest high street retailer to have put pressure on its supply base. Earlier this year, John Lewis told its suppliers they are to be subject to a 5.25% rebate of their annual sales with the retailer, because it needs “all parties to participate in showing their ongoing commitment”.

Fashion and homewares retailer Laura Ashley has also demanded an “immediate cost price reduction of 10%” from its suppliers.