More Brexit woes?
Asda, the owner of clothing range George has made the decision to place harsher terms on its clothing suppliers due the fall in the pound since the Brexit vote.
A letter was sent out on Tuesday informing suppliers that they will have to wait a third longer to receive payment. The terms have been extended from 60 days to 90.
The letter was seen by The Guardian and was sent by Alex Russo, chief finance officer and Andrew Moore, chief merchandising officer.
The two wrote: “We have recently undergone a further review of our payment terms and having considered the situation carefully, we have now made the decision to extend terms to 90 days.”
“As such, from 28 May 2017, all payment terms for import suppliers will move to 90 days.”
The George business has been hit by the falling pound due to the fact that it uses US dollars to buy most of its clothing lines.
Delaying payment is a common move to help with financial breathing space.
Mike Cherry, chairman of the Federation of Small Businesses, said: “Poor payment practices by big firms are responsible for killing off thousands of smaller businesses a year and threatening the existence of many others.”
“This yet again highlights the need for a crackdown on late payments, which I hope will be top of the list for the government’s new small business commissioner.”