YNAP sets 90-day payment terms, raising concern among small brands – WWD

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LONDON – Net-a-porter and Mr. Porter are moving all outstanding payment terms to net 90 days, Yoox Net-a-porter Group said in a memo to brand partners obtained by WWD.

The new payment terms will apply to any Net or Mr Porter brand partners who do not yet comply with these terms with immediate effect from Spring 2022, including all purchase orders already issued for the season.

The e-commerce giant said the move was to “standardize the payment terms applied by Net-a-porter and Mr Porter” across their fulfillment centers to maintain payment dates and reflect some of the commercial terms already agreed. with partner brands. .

In the memo, Lea Cranfield, director of buying and merchandising, said the majority of its brand partners across the group are already operating on payment terms of 90 days net or more.

Cranfield added that if the new terms present a “significant challenge” for any brand, it may be possible to use an Amex payment facility, which would allow faster payment, although this would incur a fee.

The new terms could be difficult for smaller brands, many of which already have cash flow problems.

While payment terms vary widely by brand and retailer. Most brands will receive payment on average between 30 and 60 days from retailers. It’s not uncommon for smaller brands and start-ups to get 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 on a 60-day contract with YNAP, said changing payment terms would not affect his business too much. However, they said they fear emerging brands will face great difficulty with a 90-day payment window. This means they will have to bear the risks and costs of producing a collection for a longer period of time.

“For small brands, this change is very bad. They hold a cash season,” the designer said.

A creative director at 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 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 subject to negotiation. “Sure, [YNAP] will offer tough terms, but that doesn’t mean you can’t push them and negotiate. Not all the power belongs to retailers, brands have a lot too,” the official 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 renewed emphasis on the retailer’s high-end luxury offering, with more runway pieces and wider assortments of big brands in the luxury space, whether it’s the heritage of names like Bottega Veneta and Saint Laurent or younger names like Khaite.

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