Asos seeks 3% discount on orders in bid to cut costs

Asos suppliers discount profit warning
Asos has issued 2 profit warnings in the space of a year and is under increasing pressure
// Asos wrote to suppliers to ask for discounts on orders
// The ecommerce giant seeks to cut costs after issuing 2 profit warnings

Asos has asked suppliers for discounts on its orders as the online fashion retailer seeks to cut costs after two profit warnings.

Asos wrote to suppliers to request a three per cent discount in prices on all stock it receives after September 1.

The ecommerce giant said the “necessary change” in payment terms would “fuel joint growth” for the pureplay and the brands it stocks.

Asos has issued two profit warnings in the space of a year and is currently under increasing financial pressure.

The retailer’s “operational issues” stemming from a new warehouse in the US affected sales growth, which was “lower than expected” in the four months to June 30.

Full-year profits are now expected to come in between £30 million and £35 million on a pre-tax basis.

In the letter to suppliers, seen by Drapers, Asos highlighted the launch of warehouses in the US and Germany as “transformational investments” for the business.

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.”

Click here to sign up to Retail Gazette‘s free daily email newsletter


  1. These issues all seem to stem from the US expansion – how did they get it so wrong? Why should suppliers be asked to foot the bill for Asos’s bad decision by their existing management? The suppliers should only agree to offer discounts if the current board offer their resignations – they need to be held accountable.

  2. This is only the start. Asos wanted to be number 1 in online retail without having proper management. More bad news will come and the share price will collapse.


Please enter your comment!
Please enter your name here