// Primark extends commitment to support suppliers by agreeing to take £370m of additional products
// This means it will now take all product that was both in production & finished, and planned for handover by April 17
// Primark had previously committed to paying for orders in transit or booked for shipment by March 18
Primark has extended its commitment to support suppliers by agreeing to take £370 million of additional stock to add to the £1.5 billion of stock already in stores, depots or in transit.
The value retailer said the announcement means it will now take all product that was both in production and finished, and planned for handover by April 17.
Primark had previously committed to paying for orders that were in transit or booked for shipment by March 18.
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The new commitment brings Primark’s total stock both owned and committed to nearly £2 billion while its stores remain closed due to coronavirus lockdowns.
The retailer also said the announcement would not affect the commitment made within the overseas wages fund Primark announced on April 3.
The value retailer had established the fund to make sure overseas factory workers are paid as soon as possible for work on Primark product that was in production in Bangladesh, Cambodia, India, Myanmar, Pakistan, Vietnam and Sri Lanka.
Primark said today’s announcement follows extensive one-to-one conversations with suppliers, which began four weeks ago and helped identify mitigating options, including extended payment terms.
The retailer said its product and sourcing teams would continue to work closely with suppliers to implement these plans.
Where suppliers need new sources of credit, Primark would seek to assist by either its commitment to orders, initiating conversations with international lenders or liaising with governments.
Primark also hopes to re-commence placing future orders for autumn/winter stock once there is further clarification of the reopening of stores.
“This announcement represents a further ongoing commitment to our relationships with our suppliers,” 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.”
Last month, Primark revealed that it expects to lose £650 million in sales a month due to the lockdowns ordered by governments worldwide.
Primark sales’ blow is exacerbated by the fact it does not trade online like many of its high street competitors.
Meanwhile, it introduced a temporary 20 per cent reduction in pay for senior executives, and a temporary 10 per cent cut for the remainder of colleagues across its headquarters and office functions for the coming 12 weeks.
The Primark leadership team is due to take a temporary 30 per cent salary cut and no bonuses are to be issued for this year.
Marchant, along with finance director John Bason and George Weston, chief executive of Primark parent company AB Foods, all requested a temporary 50 per cent reduction in their base pay.
Primark’s 30,000 UK store staff were paid their full wages until April 5, after which they were placed onto the government’s Job Retention Scheme to receive 80 per cent of their wages.