RE: Further SOH Podcast10 Jan 2023 10:24
To be fair to SOH, the financial difficulties their biggest slimbiome Customer H&B has suffered (now seemingly resolved) did not help the H1 financial figures
https://www.thegrocer.co.uk/high-street/holland-and-barrett-apologises-over-late-payments-as-owner-concludes-700m-debt-deal/673854.article#:~:text=Deli%20Retailer%20Awards-,Holland%20%26%20Barrett%20apologises%20over%20late%20payments%20as,concludes%20%C2%A3700m%20debt%20deal
Holland & Barrett has vowed to improve supplier relations amid growing protests from small suppliers over late payments extending past 120 days, with new government data showing the business paid almost 60% of invoices outside its agreed terms.
It comes as the retailer’s owner LetterOne, which has been plagued by challenges linked to its sanction-hit Russian investors, completed a deal to buy back more than £700m of debt, The Grocer has learned.
In communication seen by The Grocer, Holland & Barrett today told suppliers the deal, which concluded yesterday (22 November), left the group “debt-free and capitalised to drive our ambitious transformation programme”.
A source close to the group said the investment demonstrated LetterOne’s long-term commitment to H&B. The source added it was “extremely positive” for suppliers as it meant H&B had no external debt burden and now had “one of the strongest capital structures in the sector”, eliminating future refinancing risk.
The move should mean suppliers are also able to secure trade credit insurance for H&B, which had been pulled given the leveraged nature of the group.
Dozens of SMEs, including startups, in the fmcg space have contacted The Grocer to complain of repeated late payment by H&B, putting pressure on already strained cashflows and stretching resources while chasing down invoices.
According to government payment data filed by H&B this month, 58% of the retailer’s invoices were not paid within agreed terms in the six months to 30 September 2022, compared with 32% in the prior six months.
H&B took an average of 63 days to pay invoices, with 20% paid within 30 days, 43% in 31 to 60 days and 37% in 61 days or more, the data revealed.
Most small brands are on 90-day payment terms with H&B.
The Grocer heard anonymously from a number of businesses who had not been paid for 120 days-plus and, in some cases, more than 180 days, having had to repeatedly chase H&B and threaten withholding future orders.
Brands reported being owed six-figure sums and receiving excuses from H&B including software issues, system errors and problems related to finance team members leaving.
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