Furniture & fashion retailer Laura Ashley has been accused of forcing suppliers to operate at a loss after sending a letter to suppliers demanding a cost price reduction, it has emerged.
Suppliers received a letter a fortnight ago calling for “an immediate cost price reduction of 10 per cent” including on orders already placed, according to the BBC.
Support group the Forum of Private Business (FPB) accused the retailer, which has 200 stores across the UK, of operating in a “lazy and destructive” way.
Laura Ashley said in a statement that it had “very strong and long-term relationships” with suppliers.
It added: “We work closely with them to deliver the right products at the right prices for our customers and are having ongoing positive conversations with all our suppliers to ensure we keep doing this.”
Such a reduction would put pressure on suppliers already operating under squeezed condition, argued the FPB, which called the 10 per cent reduction a “huge amount”.
A spokesman added: “In fact it probably means in many cases the supplier is making no profit or even operating at a loss.”
Earlier this month, the FPB criticised leading department stores Debenhams and John Lewis for their treatment of suppliers and accused the latter of “bullying” after it demanded a rebate and instructed suppliers to make discounts on invoices.