Coronavirus: Primark agrees £370m deal with suppliers after backlash
Primark has agreed to pay an extra £370m to suppliers after the budget retailer was criticised for cancelling orders during the coronavirus lockdown.
The high street giant announced this morning that it will now “take all product that was both in production and finished, and planned for handover by 17 April”.
Primark had previously committed to paying for stock that was in transit or booked for shipment by 18 March. Following today’s announcement, the retailer has stock of almost £2bn while all of its stores are closed.
Major retailers including Sir Philip Green’s Arcadia group, Asda’s George range and New Look have cancelled orders with suppliers after all non-essential stores were ordered to close under the government’s coronavirus lockdown rules.
Some companies have reopened their online operations, however Primark does not offer a delivery service.
Primark chief executive Paul Marchant said: “We have been in close and regular contact with our suppliers over the last few weeks to find a way forward, and to pay for as much of the previously ordered product as possible.
“Transparency and clarity have been at the heart of our longstanding relationships with our supply base and we were obviously disappointed that we were not initially able to commit to this stock.
“Our partnerships with our suppliers are invaluable and we want to continue to support them as we navigate our way through this global crisis.”
Primark said it had been in “extensive” talks with suppliers to find a solution, including extending payment terms, and will continue to work closely with its supply chain.
If suppliers need new sources of credit, Primark said it will demonstrate commitment to orders, initiate conversations with lenders and liaise with governements.
The retailer will recommence placing orders for Autumn/Winter stock when it has further clarification on when stores will be allowed to reopen.