Asos has written to suppliers to request a 2% discount on ordered goods, Retail Week understands.
Asos sent letters to its Asos Design and third-party branded suppliers on Monday (February 28) seeking to change trading terms, taking effect retrospectively from February 1.
The fashion giant had previously worked to absorb inflationary costs over the last few months, including applying “low- to mid-single-digit price”.
The retailer is now looking to share some of the burden with its suppliers in order to maintain competitive prices for customers.
In return for a 2% discount, Asos will reduce payment terms for some of its own-brand Asos Design suppliers from 60 to 45 days to generate better cash flow.
It is understood these changes will not affect small and medium-sized businesses.
In a letter to suppliers seen by Drapers, Asos chief commercial officer José Antonio Ramos wrote: “In recent months, we’ve absorbed the effects of inflation and worked to offset it as far as possible through our own internal cost-saving initiatives.
“We know that inflation will have impacted you, too. While we continue to absorb most of the effects of inflation, we now must work with you to share some of the burden and put in place measures essential to maintaining competitive prices for our customers.”
Asos declined to comment.
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