Planet Organic is asking its suppliers to help fund the opening of its new north London store - in spite of recently securing a major cash injection from private equity.
The retailer is set to open its Queen’s Park site in early August and has written to its listed brands to ask for a donation of stock to cover the first month’s sales.
The letter from Planet Organic buying director Al Overton, seen by The Grocer, begins by acknowledging the deal last October with consumer brands investor Inverleith for an estimated £15m.
The funding would drive ‘a store expansion plan with the ambition of driving Planet Organic from a seven-store business with a turnover of £30m to a 19-store business turning over £90m within the next five years’ it says.
It goes on: ‘Opening a new store is an expensive business, and to make our investment go as far as possible, to open as many stores as possible, we are asking our brands for a contribution to the new store.’
It adds: ‘We hope you will see this as a worthwhile investment in your business, and we look forward to growing your brand at Planet Organic.’
The retailer’s request was neither unusual nor a mandate from Inverleith, Overton told The Grocer. “As with every time we’ve opened a store in the past, we are talking to our supply base for a fairly modest contribution to the opening cost. We try to make that as easy and as manageable as possible.”
The “vast majority” of brands were happy to make a contribution, he said. “We have also explicitly told them there is nothing riding on whether or not they wish to contribute. Whether they support us or not does not affect the range going into the store or positioning on shelf.
“There’s nothing riding on this. If everyone says no, all that happens is that new store costs us more money.”
Appealing for donations was “very standard” for store openings, said David Sables, CEO of Sentinel Management Consultants. “It’s been an excuse for a request for money ever since I can remember. It’s a ludicrous standard request.”
Not all suppliers are happy, however. One told The Grocer: “This is Planet Organic trying to squeeze money out of suppliers in a very amateurish, ham-fisted way. It’s come out of the blue, and I understand that suppliers are kicking off about it all over the place, indignant and refusing to pay, and Planet Organic is now in damage limitation mode.”