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.
UK retailer Debenhams has been criticised following revelations that it demanded deductions from suppliers, including 16.7pc of 16.7% on payments settled within 90 days. The industry average for payments to suppliers is 42 days, according to the Federation of Small Businesses (FSB). Mike Cherry, national chairman of the FSB, described the charge as “totally immoral”. Debenhams is also reported to have demanded deductions for each bar-coded item requiring scanning, and in relation to carrier charges. The company is this week expected to report a 19% fall in annual profits to £95.4m ($125.6m).