New Look suspends payments to suppliers for existing stock 'indefinitely'
"Coronavirus: New Look delays supplier payments 'indefinitely'", 3 April 2020
New Look says it is suspending payments to suppliers for existing stock "indefinitely", telling them in a letter that the stock can be collected by its owners. The retailer is also cancelling orders for its Spring and Summer clothing lines and won't pay costs towards them.
New Look told the BBC it did not take the decision lightly. "This is a matter of survival," it told suppliers. The firm said it was still trading online, but its distribution centre was full and it could receive no more goods.
“We are acutely aware that our suppliers are facing their own challenges at this time...” [New Look Chief executive] Mr Oddy wrote in his letter. “Government support schemes continue to be announced throughout the world, and we encourage you to pursue any options that are available to you.”...
[A] supplier... said small firms could not afford to trade in those circumstances and accused New Look of “passing all the risk on to the supply chain”. The firm said it, and others like it, had its designs manufactured in China and could not afford to take on all the liability by itself... “The new reality in China is that factories now insist on deposits for all orders placed on behalf of grocers and large retailers, as they cannot afford orders to be cancelled with no compensation to cover raw materials and production.”...