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AGENT PROVOCATEUR
Agent Provocateur
T
he time has come for suppliers to have their say. Over the years difficult and prohibitively expensive to purchase, as the risk is so high. A
retailers, through the guise of “misfit” etc., have been able to voice retailer only has to pay a week overdue, and the credit houses are on
their opinions about all sorts of topics, but now it’s time for a yellow alert, a month overdue and it is red alert and the flag goes up (or
different perspective. Like the Scarlet Pimpernel you may seek me comes down) and after that war is declared and good business
here or seek me there…but, am I a manufacturer? Agent? Distributor? relationships have become a battleground with massive casualties on
Well, that’s for me to know and you to find out! Over the coming months both sides.
I will hopefully address some of the situations I have come across in the It works like this (and unbelievably many well-established shops still do
footwear industry, funny, sad, or just plain odd, but I would also like to not comprehend there is a system no longer called ‘the old boy network’).
share some serious thoughts about the industry from the other side of Most suppliers use a credit house to insure the debt, until the goods are
the catwalk. paid for, which does not come cheap. They enable the supplier to
My first topic to get the old juices flowing is “Insured credit”. More of guarantee to the manufacturer that they will be paid (and so on). The
you now than ever before will be thinking, ‘I wish’ or ‘I hope’ but this is no insurance company will put a time limit to how long the debt will last. The
cosy bedtime story! insurance company will do a credit check by asking other suppliers about
It has long been considered by established retailers (particularly how quickly the retailer pays and will look at their accounts via
independents) that the manufacturers/suppliers of footwear are the Companies House. They can decline to insure a company for many
wealthy ones, who can spread their benevolence by buying lunches and reasons like; non-return of yearly accounts, county court judgments, etc.
dinners and give out expensive incentives, as well as expecting them to If a retailer is referred to an insurance company by a supplier for non-
support their trade association to say thank you for buying our goods. payment, then the retailer will lose credit not only with that supplier, but
From our side of the fence it is generally felt the retailer has often played will also get a black mark against them affecting other supplier’s credit
‘hard done by’ (though dealing
with the general public of today,
you may have a point). Without
doubt this is where the phrase
You may remember Margaret Thatcher saying ‘running the country is
‘urban myth’ derives from. I
like running a corner shop’ (she also said ‘on your bike’ - definitely a
don’t want to alarm you, but if
you think the biggest profit and retailer at heart!). Every retail problem is the same for the supplier -
least risk is with the supplier…
then it is time for a wake up call.
only bigger - more jobs at stake, larger debts that will bankrupt many.
You may remember Margaret
Thatcher saying ‘running the
country is like running a corner shop’ (she also said ‘on your bike’ - (sadly one small claim from a supplier can mean losing large amounts of
definitely a retailer at heart!). Every retail problem is the same for the credit with another). The supplier has a duty to inform the insurance
supplier - only bigger - more jobs at stake, larger debts that will company about late payment, or they too are also at risk of losing their
bankrupt many. credit terms. You may ask (or beg) for more time to pay, which is
Money makes the world go around - and that is our problem… it hasn’t dreadful for the person you deal with, but it still has to be recorded
gone around for the past 18 months. We have all thrived on a wonderful (although a small payment is better than none). Once credit has been
cushion called credit, with an under-sheet called insurance, folded neatly lost, then the only way trading can resume is via pro-forma invoice. A
around a solid divan otherwise known as The Bank. But, little did we vicious circle to give us all nightmares, because the bed we all depended
know that the bank was worn out, had had the stuffing taken out of it, on was as reliable as an inflatable mattress.
had been rested on once too often - and that the under sheet would fold Of course, a number of you are thinking: “what a load of drivel this
itself up and retreat behind the headboard taking the cushion with it! person is talking, we don’t have any trouble with paying suppliers,” then
Now, none of us can rest easy. think yourselves lucky and please do not get complacent. I have seen
We all need a cushion to rely on, i.e. credit, and suppliers want to give many seemingly profitable businesses come and go due to cash flow and
credit to retailers to despatch orders, allow them time to sell their goods, losing insurance. If you need help, then ask for it, don’t just pray it will go
so they in turn will pay their bills within the agreed terms and conditions. away – it won’t. You are not alone in wanting your business to remain
Knowing you will get paid for the shoes you are making is helpful, when profitable and there are placebos - a payment plan can be a wonderful
eight months in advance you are placing massive orders for leather and security blanket!
component parts in order to make the shoes the retailer has kindly Now, I can really hear you snoring… so... sleep well – and don’t have
ordered. But, insurance for bad debt has never come cheap and now it is nightmares!
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FOOTWEAR TODAY
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JANUARY 2010
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