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Debenhams demands 'immoral' supplier discounts

Ashley Armstrong
The emails showed that the retailer demanded steep discounts for paying smalls businesses within 90 days - Clara Molden

Debenhams has come under fresh criticism for its treatment of suppliers after it emerged the retailer had  demanded steep discounts for paying small businesses within 90 days, double the industry average.

In emails seen by The Sunday Telegraph, Debenhams demanded a series of deductions from a supplier, including a 16.7pc discount on settlement of payment within 90 days, a deduction for every bar-coded item that had to be scanned, and a further carrier charge related to delivery of goods. 

“To charge small businesses for paying on time is totally immoral, let alone for paying within 90 days which no one can consider prompt,” said Mike Cherry, national chairman of the Federation of Small Businesses.

The industry average for supplier payments is 42 days, according to the FSB. The Government this month installed MP Paul Uppal as its first small business commissioner, who met with the FSB last week to discuss his mandate of tackling “supply chain bullying”.

A Debenhams spokesman said that the retailer had not changed its terms with suppliers and said its average payment was 60 days.  This week, Debenhams is forecast to report a 19pc fall in annual profits to £95.4m as the department store chain counts the costs of a weaker pound, higher rental bills and wage increases, while sales could flatline at £2.9bn.