Suppliers have hit out at the “excessive” fines issued by Asos.com for “minor” breaches of its delivery rules, amid a crackdown by the etailer.
Asos has begun clamping down on those who fail to adhere to its delivery compliance manual, which was relaunched in May when the etailer’s Barnsley warehouse became fully automated.
A number of brands told Drapers Asos has begun issuing standard £500 fines for “minor” indiscretions, including boxes of clothing being 1mm too big or the wrong number being placed on a barcode.
Some said they suspected the crackdown was a way of recouping lost profits. One brand owner said: “They have become a lot more stringent since the profit warnings over the last couple of months. It will hit smaller privately owned brands badly.”
The head of UK for another brand said: “It’s quite excessive. We sell to lots of other retailers from Selfridges to House of Fraser and they are tight on standards, but we never get fined. [Asos] is being overzealous and it makes me think that they are trying to recoup some cash through their suppliers.”
Another source said: “They had been letting people off with charges, but they are going to be stringent on enforcing them going forward. The fines are quite unreasonable.”
Drapers has seen an email sent to a supplier in the last fortnight saying the brand had incurred a £500 charge for an incorrect number on a barcode.
When asked about the email, a spokeswoman for Asos said it was sent as a warning and emphasised no official invoices have been sent to suppliers to date.
She added: “The compliance manual was re-launched in May in preparation for the recent successful automation of Barnsley, yet another of our initiatives to ensure speed of product to customers.
“We are seeing month-on-month increases on full compliance of deliveries. Any fines included in the manual are in line with the rest of the industry and have not been increased. Importantly, we have relationships with our suppliers that mean we have not issued any [fines] yet.”
This week Asos chief executive Nick Robertson defended the performance of the etailer after a “challenging” year, saying what doesn’t kill the business “can only make it stronger”.
Following three profit warnings this year, Asos announced on Tuesday that annual pre-tax profits dropped by 14% to £46.9m - just above analysts’ expectations.
However, Robertson insisted the business was still growing at a “better rate” than its etail peers, with sales increasing by 27% in the year to August 31 to £955.3m.
“We increased sales by over £200m this year; that’s bigger than Boohoo’s growth. Our growth in the UK was 35%. We’re not worried about our competition [here].”
The company has promoted its chief financial officer Nick Beighton, who has worked at the etailer for five years, to the chief operating officer role with immediate effect.
Link: For a profile of Beighton, visits drapersonline.com