LONDON – Net-a-porter and Mr. Porter are moving all unpaid payment terms to 90 days net, Yoox Net-a-porter Group said in a note to brand partners obtained by WWD.
The new payment conditions will apply to any partner of the Net or Mr Porter brand not yet respecting these conditions with immediate effect from spring 2022, including purchase orders already placed for the season.
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The e-commerce giant said the move was aimed at “standardizing the payment terms applied by Net-a-porter and Mr. Porter” in their distribution centers in order to maintain payment dates and reflect some of the already trading terms. agreed with partner brands. .
In the note, Lea Cranfield, director of purchasing and merchandising, said the majority of its partner brands across the group are already operating with payment terms of 90 days net, or more.
Cranfield added that while the new terms present a “significant challenge” for any brand, it may be possible to use an Amex payment facility, which would allow for faster payment, although this will incur a fee.
The new conditions could be difficult for smaller brands, many of which already have cash flow issues.
While payment terms vary widely by brand and retailer. Most brands will receive an average payment between 30 and 60 days from retailers. It’s not uncommon for smaller brands and start-ups to receive up to 30% down payment to help with production, with the rest paid on delivery.
A designer who asked not to be named and whose brand is under 60-day conditions with YNAP, said the change in payment terms would not have too much of an impact on his business. However, they said they feared emerging brands would face big challenges with a 90-day payment window. This means that they will have to bear the risks and costs of producing a collection over a longer period.
“For small brands, this change is very bad. They’re having a cash flow season, ”the designer said.
A creative director of a London fashion brand who asked not to be named told WWD that “90 days is a joke. If they don’t pay the deposit, you have to invest the money in the production in advance. After delivery, which is usually before the [runway] show, your cash will be very vulnerable.
Separately, a showroom manager argued that the new terms could be negotiated. “Sure, [YNAP] will offer tough terms, but that doesn’t mean you can’t push them and negotiate. Retailers don’t have all the power, brands have a lot of it too, ”the director told WWD.
WWD has contacted YNAP for comment.
Coincidentally, Net-a-porter said during its fall 2021 update in May that it would put a new emphasis on the retailer’s high-end luxury offering, with more runway pieces and wider assortments of major luxury brands, whether it is the heritage of names like Bottega Veneta and Saint Laurent or younger ones like Khaite.