Bad news supplied by Mothercare

TROUBLED Mothercare has turned the screw on suppliers by imposing a 2.5pc extra charge on all invoices in a desperate attempt to bolster finances.

The firm, which jettisoned chief executive Simon Calver earlier this year and issued a string of profits warnings, also extended the period of time it would take to pay suppliers.

Up to 500 received a letter from finance director Matt Smith on Thursday, seen by the Daily Mail, stating: ‘We need to move to a more commercial agreement to secure Mothercare as a strong business for mutual benefit. Therefore we would like to confirm that we are implementing some new terms to all commercial agreements across our supply base.’

From May 18 Mothercare will wait 90 days before paying bills, and will also take a 2.5pc extra rebate to ‘all existing terms’.

One supplier said it was considering whether to withdraw products from the chain. It felt aggrieved because, having agreed terms, it felt Mothercare (flat at 186.75p) had then attempted to squeeze more.

Mothercare’s UK stores have been struggling for some time. It pulled a similar stunt in 2012, forcing suppliers to take a 7.5pc cut on their sales.

The firm said: ‘As part of the continuing work to improve our performance our suppliers are being asked to play their part in helping to support the turnaround in UK profitability.

‘In turn our suppliers will benefit from a strengthened UK business, as well as the continuing growth of our International operations.’