Debenhams gives its suppliers an unexpected Christmas present- less money.

19 December 2013

Bah ...
Bah ...

With the big day now less than a week away, retailers are on the final push to bag more of those festive profits to make themselves look good. But, given consumers are still, apparently, being cautious at the shops, just how would a luxury department store go about improving its figures? By extracting every last drop of profit out of its suppliers perhaps?

In a strange move, retail giant Debenhams has apparently levied what’s being called a ‘Santa Tax’ on its suppliers of own-branded products, informing them that they will receive 2.5% less than they were expecting, all in the name of Christmas cheer.

Thisismoney.co.uk report that the letter to suppliers sees the department store tell suppliers that  it will be “applying a single sum contribution on all outstanding payments on your account at close December 17. An additional discount of 2.5 per cent applied to all open orders on our system at close on December 17.”

Debenhams told thisismoney that: “We have asked suppliers for a contribution to support our commitment to ongoing investment in the business” and denied that it was an attempt to bolster lacklustre Christmas trading. Yeah, right.

Regardless of whether Debenhams can actually do this, and you can bet they probably checked their terms of business first, this is a tactic Scrooge himself would be proud of. Debenhams suppliers are, understandably, less than impressed. A nameless supplier is reported as saying “slashing income we thought we were getting just a week before Christmas is an underhand thing to do and shrieks of desperation.” We’d have to agree.

While things may be tight for everyone at this time of year, perhaps dropping things from a great height on to smaller businesses is not really in the spirit of goodwill to all men. Perhaps Debenhams should take a leaf from another UK luxury department store and make a cartoon about woodland animals, promise to pay tax and look after its employees. They might get a hit Christmas single too.

So what do you think? Is this an underhand, unseasonal gesture worthy of a pantomime villain, or don't you care so long as Debenhams keep coming with the sales...

TOPICS:   High Street News

8 comments

  • Joulupukki
    They absolutely can, and do, do this. A few years ago dear old Boots, who aren't tax dodgers in any way at ALL, told their print suppliers - many of whom worked on wafer thin margins to get the contract - that they wanted a 3% rebate on print costs, and they wanted it backdated for years.
  • Dick
    Just tried it in store. I took an item to the cashier and let her ring it up. Then told her I want a 20% contribution to support my commitment to an ongoing investment in the alcohol consumption business, but I was refused.
  • andy y.
    They can and they can't.The supplier could enforce in court payment at 100%.Of course they would risk getting no further biz.
  • Debensham
    Debenhams are a horrendous company to work for. They treat their staff like slaves and pay them the bare minimum. One company I wouldn't complain about going out of business.
  • ugly j.
    And the stories about people living in London. They where good as well.
  • ugly j.
    And the foxes! Who could forget the foxes, then BW ran a story about Megan Fox. What larks.
  • Alexis
    "They absolutely can, and do, do this. A few years ago dear old Boots, who aren’t tax dodgers in any way at ALL, told their print suppliers – many of whom worked on wafer thin margins to get the contract – that they wanted a 3% rebate on print costs, and they wanted it backdated for years." That's because they know nobody will give up such a massive contract. I don't think they've got a leg to stand on, but no supplier is going to give up regular work for the next few years.
  • Noghar
    All the big supermarkets did this for years to their suppliers, demanding 'retrospective discounts'. It's basically blackmail. For all I know they are still doing it.

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