Mitre 10 tech issues cause delayed payments to suppliers

The Mitre 10 Mega Mt Wellington Omicron exposures span four days.

National retailer Mitre 10′s head office has suffered problems with a new system that has delayed payments to some suppliers.

In a letter emailed out last week, the home improvement chain thanked its suppliers for “ongoing patience” on payments while acknowledging the situation was “not ideal”.

Two suppliers, when contacted by the Herald, expressed empathy and praised the head office for being transparent and open about issues.

Mitre 10 (New Zealand) chief executive Andrea Scown and chief financial officer Mark Conelly said in their letter there had been problems with invoices.

They told suppliers the business had actioned an “out-of-cycle payment” as part of a payment run to 11 per cent of suppliers.

Parties selling to Mitre 10 told the Herald that data processing or SAP issues were at the heart of the problems and not Mitre 10′s fault.

The Herald reported on November 1 how head office recorded a $67 million loss after expenses from a big information technology upgrade.

Scown and Conelly told suppliers via email that payments had been made after considering the wider impact of trading terms on its accounts, including rebates, and amounts remained overdue for payment at the end of January 2024.

They asked suppliers to hold amounts as unallocated credit on their Mitre 10 accounts “while we clear remaining overdue invoices and prepare to provide a clean remittance advice, which you can apply these funds against.

“While I acknowledge this is not ideal, I know receipt of these funds is also an important step forward in restoring your confidence in our payments process,” the email from Scown and Conelly said.

Mitre 10 chief executive Andrea Scown. Photo / Dean Purcell

On November 24, the Herald published a power list on who owns Mitre 10 - New Zealand’s largest garden, DIY and hardware chain.

Before Christmas, Mitre 10 told suppliers it expected to be largely back within trading terms by the end of last month.

“While we have made significant progress towards meeting that objective, I know we are not there yet for a number of our suppliers. However, I am seeing much better resolution performance around processing recent invoices, giving us confidence that our processes are getting much better and more streamlined, with a particular improvement in invoice matching rates,” the email said.

That gave confidence the business could maintain a position of being within its trading terms, with the exception of credit claims and genuine queries, which would have been the case historically.

“As we move forward, we expect to be able to provide clean remittance advices to you before the end of February 2024.

The email did obliquely touch on the huge IT upgrade.

“As you’ll appreciate, this aspect of our significant business transformation has been immensely challenging – especially given our proud history of meeting payment obligations to our supply partners. Thank you for your ongoing patience as we take the final steps to resolve and clear remaining invoices due for payment,” the letter said.

Mitre 10 is one of New Zealand's largest garden retailers. Photo / Kate Durie

Asked about the situation, Scown told the Herald the company head office had been working through issues impacting how some supplier invoices flow through its newly implemented payments system.

“The issue relates to the interfacing between new and legacy systems while we transition to our new platform. We have been communicating directly with affected suppliers and have put additional resourcing in place to get this resolved as quickly as possible. We regret the inconvenience it has caused and emphasise that this is a temporary situation. As a business with a near 50-year history that truly values our supplier partnerships, getting this fully resolved is our top priority,” Scown said.

One national supplier to Mitre 10 told the Herald today there were “wrinkles”, which were being ironed out. His business had no payment problems with Mitre 10, which his company had been supplying for decades.

He praised the business, saying it was substantial and the problems were not a permanent issue.

Another supplier said he sympathised with Scown and Conelly.

“I take my hat off to them and how they coped with the situation. They’ve been transparent the whole way through,” he said.

Direct praise had been sent to Scown for how Mitre 10 was handling this, he said.

The business was far more open and friendly to its suppliers than many others, he said. He had nothing but good things to say about Mitre 10 and said that was customers’ experience too.

The business stood by good old-fashioned values of openness, transparency and honesty and deserved full credit for that, he said.

A country with a population of a little more than 5 million and “a large stretch of water separating us in the middle” was loyal to the business which understood most retailing was a face-to-face business in this country, the supplier said.

New Zealanders were not buying online in the volumes that people in some other countries were, he said.

Staffing stores with well-trained and helpful staff was one of the ways Mitre 10 retailed its great reputation, he said.

Anne Gibson has been the Herald’s property editor for 24 years, has won many awards, written books and covered property extensively here and overseas.