Debenhams angers suppliers with Santa tax

Published on: 23rd November 2015

The company is requesting discounts from suppliers for the second time in three years.

debenhams-480Debenhams has contacted suppliers asking for a reduction of between 1% and 2% on bills in exchange for payment 30 or 60 days in advance to current terms.

In 2013, the department store chain caused controversy with the first Santa tax, after requesting some suppliers to cut prices by at least 2%, eight days before Christmas.

The Sunday Telegraph reported that in the letter Debenhams wrote to suppliers, it said the window for shorter payment terms will last only for a set period between 24th November 2015 and 26th May 2016.

The letter also read: “The working capital benefits associated with early payment are subject to suppliers agreeing on additional discount on the value of the associated invoices.”

Independent retail analyst, Nick Bubb, said: “It smacks of a tough trading period at Debenhams, and that they are looking to protect their margins. It’s actually outrageous that they have to wait longer than 60 days at the moment.”


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