M&S give shoe supplier the boot

One of my neighbours just mentioned to that a business he'd been advising and which has been supplying footwear to M&S for 85 years has gone into administration with expected job losses of 200 people.

M&S accounted for 65% of their sales and so had a huge influence on the viability of the company. A few months back, M&S had refused to offer any indication of that the firm could expect a continuity of orders, during a funding round exercise for the supplier. As a result the funding disappeared at the final hurdle.

Now M&S has apparently disintermediated the firm, who'd outsourced some of its manufacture to reduce costs under pressure from M&S, and gone direct to the outsource supplier. They even asked the incumbent to introduce them! Could this have been part of an evil plan all along?

The M&S turnaround has been spectacular under Stuart Rose both financially and in-store. However, its reputation for dealing fairly with suppliers may slip with episodes like this. As a signatory to the code of dealing fairly with suppliers, one has to wonder whether the good PR at the time might return to haunt them.

Whilst suppliers have to remain competitive, fairness in dealing remains paramount throughout the value chain.

posted by John Wilson @ 12:28 PM Permanent Link newsvine reddit


At 8:43 AM, Blogger Hawkeye said...

While it might sound like an evil plan, the question I would ask is: What would you have done if you were running M&S? You have a supplier who outsources to another supplier ( for whatever reason), why would you not want to cut out the middleman? The only reason might be the backlash you might fear if your new supplier is found to be using 'sweatshop' labour and the stigma of that seems to die down quite rapidly these days anyway.


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