One supplier told Drapers: “This will impact our business, especially as it’s difficult to get credit insurance on Boohoo at the moment.”
In September 2023, The Sunday Times revealed Allianz Trade slashed cover by an average of 50% for Boohoo, with some suppliers to the fast fashion retailer having their coverage level cut to zero.
Another supplier told Drapers: “It will affect our cashflow, but I hope it works out in the long term [if it can help Boohoo improve its financial position].” He added that payment terms are now longer “across the board”, compared with three years ago.
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Boohoo had previously extended its payment terms in December 2022, from 30 to 60 days for UK-based suppliers and from 14 to 30 days for UK manufacturers.
A spokesperson for Boohoo told the outlet: “We regularly review our ways of working to ensure we are operating as effectively and efficiently as possible.
“Boohoo Group’s payment terms are highly competitive and have been updated in line with the wider industry standard.”
The move comes as the fashion giant attempts to strengthen its balance sheet under the leadership of new CEO Dan Finley.
Last month the retailer sold its London head office to private real estate firm Global Holdings Group for £49.5m.
The Debenhams owner said the sale would “further strengthen” the company’s balance sheet and part of the proceeds will be used to pay down its £47m term loan due for repayment in August 2025. This will leave the business with a £125m revolving credit facility “which is sufficient for its needs going forward”.
Boohoo put the 43,963sq ft six-storey building at 10 Great Pulteney Street up for sale in August, just two years after acquiring it in 2021 for £72m.
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