Some ASOS suppliers cut links with e-tailer for now – report
Some suppliers of online fashion retail giant ASOS are pulling back from supplying the company with goods following the withdrawal of credit insurance for the firm, according to a newspaper report on Wednesday.
But the e-tailer said this is something being seen across retail at present and it hasn’t seen any impact on its trading.
The Times said that some businesses have begun to sever ties with it as it has struggled to maintain sales and profits. Its plunging market valuation also saw it being relegated from the FTSE 250 index last week.
Some leading credit insurers have either withdrawn or reduced the cover for its suppliers, and that could place a huge strain on its cash flow. It also means companies are more likely to want payment upfront or less likely to be willing to supply it at the moment.
The report quoted several anonymous suppliers, saying that they’d stopped providing the company with goods until it gets credit insurance backing again, as the risks are too great otherwise.
But a spokesperson for ASOS also told Fashionnetwork.com: “While trade credit insurance cover has been tightening across the retail industry, we have seen no impact on our trading.”
The report comes after the company recently put new financing in place to the tune of hundreds of millions of pounds, including an equity raise from existing shareholders of £75 million.
At the same time, there has been talk of a takeover approach from a Turkish company, and also speculation that its biggest shareholder, a unit controlled by the owner of Danish fashion giant Bestseller