Boohoo and Wilko cancel orders with suppliers amid slow sales

Boohoo has been cancelling and deferring orders from suppliers and Wilko has deferred payments to suppliers to protect its squeezed cash flow, according to The Times.  

It comes as Boohoo has faced a sharp slowdown in demand. Clothing suppliers in Leicester, who are under pressure themselves from soaring energy bills, reportedly felt they were bearing the brunt of cancellations, the newspaper said.

One supplier told The Times: “Boohoo has cancelled a load of orders. We are just here to do the fast stuff and when they don’t need it, they just stop it in its tracks.”

A Boohoo spokesman said: “As is the case across a retail sector currently navigating uncertain demand, we are constantly reviewing our requirements.”

Meanwhile, it was understood that Wilko has unilaterally deferred payments to suppliers, the discounter told suppliers that payments due between September 11 and 8 October would be made in the following month.

Wilko has also changed its terms so that suppliers will be paid in a minimum of 60 days, The Times reported. The retailer declined to say what terms it previously adhered to. 

Wilko blamed the changes on cost inflation, shipment delays and the impact from store closures on the day of the Queen’s funeral.

A spokesperson from Boohoo told Retail Sector: “As is the case across the retail sector where everyone is currently navigating uncertain demand, we are constantly reviewing our requirements. We are fortunate to have very strong relationships with our supply chain and work closely with them to manage any change in demand responsibly.”

Retail Sector has contacted Wilko for a comment.