UK: Marks & Spencer extends supplier payment times
Marks & Spencer has extended the length of time it takes to pay its general merchandise suppliers in an effort to boost cash flow.
The retailer confirmed that freight on board (FOB) suppliers have seen their payment terms extended from 60 days to 75 days, while full-service vendors (FSV) will see their payment delayed to seven weeks from five.
A spokesperson for the retailer told just-style: "Like any company, we are always looking at ways to ensure we are running our business efficiently and that it is well set up for the future. As part of this, we are extending our GM supplier payment terms to bring us in line with industry standards."
The company is working to turn around its general merchandise business after recording eight quarters of sales declines.
Part of this strategy includes modernising its sourcing and supply chain practices. In May, the retailer confirmed that it would look to reduce its supplier base by 10%.
M&S also plans to move from an FOB model from FSV.
Sourcing head Krishan Hundal said in May that the moves will improve intake margin by GBP45m (US$70.6m) per year.
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