Debenhams Group warns some suppliers of payment delays

Debenhams Group, which was recently renamed from Boohoo Group, is delaying payments to some suppliers, raising fresh concerns about the company’s financial stability.

According to an internal email seen by The Telegraph, the group has informed certain suppliers that it is "running behind on payments". It has also asked them to confirm how much stock they can deliver during September without receiving additional payments.

This development comes just months after the publication revealed that customers were waiting up to a month for refunds on returned items. At the time, the group admitted to delays in processing refunds, though it did not provide an explanation.

In August, Debenhams announced it had secured a new £175 million borrowing facility aimed at strengthening its financial position.

However, the deal has faced criticism from major shareholder Frasers Group, owned by Mike Ashley. In a letter to Boohoo’s Chairman, Frasers questioned why the company had agreed to financing with such a high interest rate - 7.3 percentage points above the Bank of England base rate - when cheaper options were allegedly available. Frasers warned the deal risked money being "sucked out" of the business.

The concerns come as annual losses more than doubled to £348 million, up from £160 million the previous year. Revenues fell nearly 20% to £790 million, and the company’s net assets dropped from £280 million to just £3.9 million.

Analysts at Shore Capital said last month that Debenhams appears "very constrained" as it faces a growing cash crunch.

In response to queries about the supplier email, a Debenhams spokesperson said: "A junior colleague, in one of our smaller brands, emailed a small number of suppliers to work on capacity planning."