Asos is asking suppliers for a 3% discount on all invoices for stock received from 1 September onwards, to continue to “fuel joint growth” at the business.
In a letter to suppliers, seen by Drapers, the etailer highlighted recent “transformational investments” made by Asos including the launch and expansion of two new warehouses in the US and Germany and greater investment in sustainability, customer acquisition and customer retention.
Asos has asked suppliers for a 3% discount to ”fuel joint growth” for the etailer and the brands it stocks.
The letter said: “We have recently reviewed the current status of our supplier arrangements, also taking into account the significant investments we have made over the last few years and will continue to make, to lay the foundations for future growth.
”We have set our sights on becoming one of the few companies with truly global scale in the market, and we are confident that we will achieve this. Our future growth aspirations not only benefit us but also benefit you, our valued partner. We hope you will understand this necessary change and on behalf of Asos we would like to thank you for your continued support.”
Drapers understands it is the first time Asos has asked suppliers for a blanket discount.
In July Asos warned full-year profit before tax will be lower than expected after sales in Europe and the US were hit by teething troubles from the retailer’s overhaul of its warehouses.
Profit before tax is now expected to fall between £30m and £35m, down from expectations of £35m, as a result of £47m in transition costs. It expects retail gross margin to fall by 250 basis points. Capex (capital expenditure) guidance for the full year is unchanged at £200m.
Total sales at Asos were up by 12% on a reported basis and 11% on a constant currency basis in the four months to 30 June. Sales in the UK grew by 16% and the rest of the world by 14%.
Asos declined to comment.