UK-based retailer Primark, with nearly 370 stores, will pay its garment suppliers in full for all outstanding finished garments and also pay for any finished fabric liabilities.
After stores reopened, the retailer Primark has now placed some £1.2 billion of orders for coming seasons (up from £1 billion announced on 2 July). Its standard 30-day payment terms also remain in place.
The announcement has brought cheer to Indian apparel exporters too as many Indian apparel exporters are also associated with Primark.
The commitment to pay all outstanding follows previously announced commitments to pay in full for orders that were in production, finished and planned for handover by 17 April, after all its stores were closed in mid-March.
The suppliers will be paid for all apparels, finished and in production as well as for any fabric costs incurred for Primark prior to closure of stores. In the next few weeks, Primark will be working through the details of this commitment with these suppliers on a one-to-one basis.
“At Primark, we will have lost some £2 billion in sales this financial year and we had an £800 million net cash outflow, while the majority of our stores were closed. In March, when we had no visibility of how long stores would be closed and already with some £1.5 billion of stock in stores, depots and in transit, we had to take a number of actions quickly to ensure we were able to withstand the crisis. This included cancelling orders, which was one of the toughest decisions we have ever had to take,” Paul Marchant, Primark CEO of the company said.