Asos has written to suppliers to ask for a 2% trade discount to offset the impact of inflation that has affected a lot of retail chains and retailers.
The supply chain crisis and hike in raw material prices is seen as one of the major reasons for hike in cost in almost all segments.
The online retailer will apply the discount on orders with invoices dated from 1 February
As per the company Chief commercial officer so far the group has tried to absorb the effects of inflation and worked to offset it and will continue to absorb most of the effects of inflation, however, it now wants suppliers to share the burden and put in place measures essential to maintaining competitive prices.
Asos’ sales and profits were dented over the key Christmas trading period, with revenue up just 2% to £1.4 billion and gross margin down by 400 basis points to 43%.
The margin decline was driven by heightened clearance activity to shift “slow-moving” spring/summer 21 stock, elevated freight costs, and the use of air freight to circumvent supply chain constraints.
To ease the burden on its suppliers, Asos has agreed to reduce its payment terms for some suppliers from 60 to 45 days.
The etailer has a market capitalisation of £1.96 billion.