Luxury retailers Prada and Kurt Geiger have been called out by a campaign group for taking months to pay their suppliers.
Good Business Pays highlighted the two fashion houses and several other companies that frequently took longer than two months to pay invoices to their suppliers in the U.K.
The group says slow and late payments cost small businesses £22,000 a year on average and lead to the closure of 50,000 businesses annually.
In its March report, Good Business Pays highlighted Bud Light producer AB InBev and Coca-Cola Europacific Partners, the European bottler of Coca-Cola’s drinks, as major culprits of slow and late payment practices.
Good Business Pay’s bi-annual reports are intended to put pressure on major companies to hasten their payment practices to small businesses in the absence of government legislation forcing them to do so.
However, compared with last year, the group said the number of companies taking longer than 80, 90, and 100 days to pay companies hasn’t changed. The same companies crop up every year, the group says, suggesting a “hard-core of companies with a slow or/and late payment culture.”
On this occasion, Prada and Kurt Geiger stood out as luxury companies taking longer than average to settle their bills with suppliers.
Prada took an average of 138 days to pay invoices to suppliers, with four out of five of its invoices being paid after 61 days.
Kurt Geiger, another luxury brand, took an average of 103 days to pay its invoices. The fashion group was also named as a consistently late payer for closing its invoices after the deadline of agreed terms.
In addition, more than half of Kurt Geiger’s invoices were paid late.
Representatives for Prada and Kurt Geiger didn’t immediately respond to a request for comment.
Previous legislation has forced companies to report their payment time data or face prosecution, forming the basis of Good Business Pays’ reports. However, this put the emphasis on reputational fears changing a company’s behavior.
“Only reputational pressure from organisations like Good Business Pays, supported by appropriate legislation and enforcement from the government, will force a change in late and slow payment behaviour,” said Terry Corby, CEO of Good Business Pays. “These new measures will go some way to help drive that culture change.”
The new Labour government is planning to bring in a consultation on fair payment times and also introduced a Fair Payment Code, only awarded to companies that prove they have met good payment standards.
The consultation process will consider other measures that could force more companies to speed up their payment times.
“We’re determined to back small businesses by unlocking their barriers to growth, and stamping out late payments is at the heart of this,” U.K. prime minister Sir Keir Starmer said in September.
