// Boohoo will now pay suppliers in 60 days rather than 30, and manufacturers in 30 days rather than 14
// The online retailer insisted that its payment terms are still “swifter than most”
Boohoo Group has extended its payment terms for suppliers and manufacturers.
From 1 December, suppliers will be paid within 60 days rather than 30 days, while manufacturers’ payment timeframe will extend from 14 days to 30.
Although Boohoo insists the move will put it closer in line, and indeed swifter, than other retailers’ payment terms, such measures are often designed to preserve cash.
According to Drapers, Boohoo said in sent a letter to suppliers: “As the business grows, we continue to review our ways of working (…) We want to make you aware of a change to our payment terms that will take effect from 1 December 2022.
“As we align our terms to reflect the broader retail industry standard, we have worked hard to ensure our terms will remain competitive.”
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A Boohoo spokesperson pointed out to the publication that it had been offering “leading 14-day payment terms” to manufacturers since 2019 and was adjusting this to “closer reflect those of other retailers, albeit at 30 and 60 days our terms remain swifter than most.”
Earlier this month it emerged that credit insurer Allianz Trade had lowered its cover for Boohoo’s suppliers as its profits had plunged and consumer demand for clothing had weakened amid the cost-of-living crisis.
Boohoo warned in late September that its sales are likely to be hit during the golden quarter after it posted a fall in its half-year profits.
Adjusted pre-tax profit plunged 90% to just £6.2 million in the six months to August 31.
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