The Bookseller.com

4th July 2009

EUK asking customers for cash upfront

14.11.08

Woolworths is being forced to demand cash up front for millions of pounds of Christmas goods in a dramatic sign of how the credit crisis is spreading into the broader economy, reports the FT.

EUK would normally give wholesale customers weeks to settle bills. But in a step that underlines fears over Woolworths' creditworthiness, some of its own suppliers have begun to demand that it pay them cash immediately. This has forced EUK to insist some of its customers also pay cash in advance.

Woolworths said: "In the wake of the general tightening in the credit insurance market two months ago we had to change trading terms with a number of our suppliers and therefore come to new agreements through negotiation with some customers.

"These cover a range of different situations, have been in place for some time and are working in well." It added that there would be no interruption to supply.

FT

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