Debenhams accused of bullying suppliers

Helen Cahill
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Debenhams And Carpetright Report Challenging Trading
The retailer is expected to announce a fall in profits this week (Source: Getty)

Debenhams has hit back at accusations that it has been bullying its suppliers as it gears up to announce a fall in profits this week.

The department store asked for several deductions from one of its suppliers, the Telegraph reported, and even demanded a 16.7 per cent discount if it paid the small business within 90 days.

Debenhams also reportedly asked for a discount for every item that it had to scan, and a charge for goods deliveries.

Retailer's response

A spokesperson for the department store said: "Debenhams has not changed its terms of business with its suppliers. We have a large number of commercially negotiated discounts but these are separate to discussions on payment terms. The two will of course ultimately be contained in any supplier agreement but are not linked or traded off against each other.

"It would be very misleading to make general inferences from any one agreement with a single supplier but it is categorically not Debenhams’ policy to ask for discounts in exchange for payment terms of 90 days. Our average payment days are 60 days. We are proud of our supplier relationships and aim to follow best practice in dealings with them."

Read more: Pound drops against dollar and euro as ONS reveals retail sales slump

Investec has forecast that Debenhams will unveil a profit fall of 16.3 per cent this week, with profit before tax coming in at £95.5m, which is slightly above the consensus estimate of £95m.

Sales are expected to stay flat at £2.9bn. Analyst Kate Calvert said July and August were generally better for retailers than June, when Debenhams updated the market with its third quarter results.

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