EUK supplies products such as books, music and games to retailers including Asda, Borders, Sainsbury’s and Zavvi. The Woolworths business has faced demands from some of its own suppliers for advance payment and has therefore had to seek the same from customers.
Woolworths told The Financial Times: “In the wake of the general tightening in the credit market two months ago we had to change trading terms with a number of our suppliers and therefore come to new agreements through negotiation with some customers.
“These cover a range of different situations, have been in place for some time and are working well.”
The situation reflects the tightening of credit facilities for retailers. Credit insurance has been withdrawn or reduced for suppliers to a wide range of stores because of fears about the sector’s prospects.
Woolworths, which faces a tough turnaround challenge under new chief executive Steve Johnson, has been a particular focus of speculation.
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