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Laura Ashley latest retailer to squeeze its suppliers

Fashion and homewares retailer Laura Ashley is the latest high street name to have emerged as squeezing its suppliers on terms.

According to reports in the Financial Times, the retailer sent a letter to its suppliers asking for an “immediate cost price reduction of 10%” including orders that had already been placed.

The letter, which was sent two weeks ago, said prices were “continually being driven down with increased promotional activity and the advent of online-only retailers.”

“With this in mind, we are requesting an immediate cost price reduction of 10%. We feel this is both fair and equitable and will save us a process of reviewing our supplier database.”

The Forum for Private Business has hit out at Laura Ashley for making such demands on its suppliers calling it a “lazy and destructive” way of doing business.

“It probably means in many cases the supplier is making no profit or even operating at a loss,” said a spokesman.

It comes in the same month as two other major retailers have been blamed for similar tactics.

Department stores John Lewis and Debenhams have both recently demanded new terms from suppliers.

Readers' comments (3)

  • What a lovely way to run a business! Isn't it a shame small indies don't have the same effect! We don't even come near the same margins in the first place. I hope the public realise that supporting these giants and their forever sales is the road to ruin.

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  • Suppliers should simply say no. Then if Laura Ashley refuse to pay, sue them. You cannot have the tail wagging the dog, as is the case here.

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  • I fail to see how this can possibly be described as fair? Fair to whom? Certainly not the supplier who is already working on substantially lower margins anyway. Its about time Laura Ashley woke up to the fact that a good relationship with its suppliers is key to the sucess of any business, and this approach only serves to alienate and antagonise them and ultimately loose them.

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