Primark bolsters supplier coronavirus support package with £370m commitment

The value fashion giant has committed to pay £370m of additional orders for product “over and above the £1.5bn of stock in stores, depots and in transit”.

Primark’s action means it will now take all product, both in production and finished, which had been planned for handover to the retailer by last Friday – a month-long extension of its previous commitment.

Primark previously committed to paying for orders in transit or booked for shipment by March 19. The new arrangement means that Primark’s total stock, owned and committed, stands at nearly £2bn even though its shops are shut and it does not trade online.

The retailer said discussions with suppliers had enabled the identification of “mitigating options, including extended payment terms”.

Primark also said it would seek to help suppliers to access sources of credit by, for instance, “demonstrating our commitment to orders, initiating conversations with international lenders and liaising with governments”.

The initiative is separate from the retailer’s previous commitment to wages to factory workers in poorer countries such as Bangladesh.

Primark chief executive Paul Marchant said: “This announcement represents a further ongoing commitment to our relationships with our suppliers. We have been in close and regular contact with our suppliers over the last few weeks to find a way forward and to pay for as much of the previously ordered product as possible.

“Transparency and clarity have been at the heart of our longstanding relationships with our supply base and we were obviously disappointed that we were not initially able to commit to this stock.

“Our partnerships with our suppliers are invaluable and we want to continue to support them as we navigate our way through this global crisis.”