Suppliers of Dutch webshop VD.nl have not received payments for some time now and may never be paid in full, as the retailer launched proceedings to reach an amicable debt settlement. Managing director Alexander van Slooten asks for patience.
Delay in payments
An e-mail to suppliers with an update on the webshop’s financial situation, that the RetailDetail editors were able to get hold of, admits that there is a serious delay in payments to suppliers. It continues to say that the company has therefore started so-colled WHOA proceedings, referring to a relatively new Act in the Netherlands that allows companies to reach an agreement with their creditors to avoid bankruptcy.
Last week, VD.nl had issued a press release announcing a strategic turn: the web shop – the online continuation of defunct department store chain V&D – will start focusing on value-for-money in clothing, shoes, sporting goods and home furnishings. These are all product groups that were traditionally the strength of (offline) V&D stores.
This means that other categories such as hobby & toys, beauty & health and electronics are disappearing from the range. The retailer has faced disappointing sales since the removal of Covid measures and needs to act, but the new email makes it seem that the problems are bigger than VD.nl wants to admit.
No money left
“For old debts, incurred before 1 February 2023, the WHOA procedure means that they will be ‘frozen’ during the period when work is underway to reach a proper resolution. It is expected that in no more than two months, a proposal for amicable debt settlement will be sent to all creditors for this purpose, after which everyone can comment on it. If necessary, the court will rule on how the available funds will be divided among the creditors”, the email to suppliers states.
The latter suggests that the suppliers involved will therefore never recover all outstanding debts. They are by no means happy with this state of affairs, as they say they have not been paid by the web shop since December. Suppliers who contacted VD.nl about this, were only told that it was a misunderstanding or a technical problem. However, they now suspect they were being deliberately kept in the dark, meaning VD.nl wanted to keep hidden the fact that it is in serious financial trouble.
“Difficult situation”
Orders via VD.nl made after 1 February are not included these WHOA proceedings and will be handled and paid as per contract, the company says. “We realise that this is a very difficult situation, but hope for your understanding for the chosen route”, it reads. “Should you nevertheless decide to no longer supply items to (customers of) VD.nl, please let us know […]. Your items will then be removed from VD.nl’s webshop.”
However, one supplier reached out to RetailDetail, saying he asked VD.nl weeks ago to take products offline – but this was not yet done. As a result, products were still being sold – but not delivered – to consumers.
“Focusing on our strength”
“The fact that suppliers say they have not been paid for several months, surprises me,” manager van Slooten responded to RetailDetail. “That seems a bit long to me. But we do have some invoices delayed, that is true. We are dealing with a difficult economic climate and there were also technical issues.” He disputes, however, that the company did not communicate: “But we have around 200 partners, so maybe it went wrong with some of them.”
External consultants are now working on the matter. VD will present its creditors with a proposal within a few weeks. They may or may not then agree to that. “I understand the unrest”, says van Slooten, but “it is a new law, I did not know it myself. I have no idea how it will work out.”
The director is convinced, however, that his company has a solid business model to continue with a clean slate. “Of course I can not give any guarantees, but we would not start with this if we did not believe in it. VD.nl was able to sell well, but mostly at discounted prices. Full-price sales were disappointing. Now we are focusing on our strength: at discounted prices.”
