The move follows M&S's recent decisions to axe William Baird and Daks- Simpson from its supplier list, threatening more than 5,000 textile jobs. A fourth supplier is also believed to be on the verge of having its M&S contract terminated. The cuts are part of a plan by M&S to reduce its supply chain costs by pounds 450m by buying more of its goods from cheaper manufacturers overseas. The fallen giant announced a halving of interim profits this week.
A spokesman for Richard Roberts, which has three factories in Leicester, Hinckley and Kirkby-in-Ashfield in Nottinghamshire, said the decision had come as "a complete shock". The company has sales of pounds 50m and has been supplying M&S for 30 years. "This will have a devastating effect on people in the business," the spokesman said.
The cutbacks came as two other M&S clothing suppliers announced plans to merge yesterday in a move designed to prevent them from also being axed from the M&S supply list.
Lambert Howarth, which makes footwear and home accessories for M&S, is paying pounds 20m for the privately-owned Fast Forward, which makes scarves, hats and jewellery. The deal will make the enlarged company one of M&S's top five suppliers. The two companies said they had not been pushed into the deal by M&S although the retailer said it supported the move. "There hasn't been any influence from us but we can see the advantages," M&S said.
M&S feels it has given too much support to some of its British clothing suppliers in the past. It wants them to make tough decisions to improve their businesses.
Lambert Howarth has been supplying M&S for 80 years. It makes the Footglove women's shoes for the retailer but is keen to expand into other areas. More than 80 per cent of its output is supplied to M&S, mostly from overseas factories in Portugal, Sri Lanka and Italy.
Fast Forward makes all its goods overseas in cheap labour countries such as the Philippines. Robert Garfit, Lambert's chief executive, said: "I hope this gives encouragement to people to support M&S and move on."
Lambert Howarth has sales of pounds 110m and last year recorded profits of pounds 4m. Mr Garfit said: "The enlarged group will be able to offer M&S and other customers a broader range of products sourced predominantly from overseas... This fits with the trend towards consolidation within the supply chain of M&S."
Leader Review, page 3Reuse content