The British company has been in free fall for seven months, in which it has reduced its stock market value by 62% and has been forced to issue two profit alerts
The online clothing sales platform ASOS is going through financial problems and does not hide it. Shortly after being forced to issue two benefits alerts in which they warned their shareholders about the company’s bad results, they have sent a letter to all their suppliers asking for a 3% discount. “Our aspirations for growth not only benefit us but you, valued partner. We hope you can understand this necessary change,” reads the paper published by the business magazine Drapers and collected by The Guardian.
Asos is a low-cost British clothing and accessories store that sells more than 850 brands and ships to 200 countries – including Spain – from its warehouses in Europe and America. In fact, one of the reasons the company points to as causing the need to lower costs is the next opening of its logistics centers in Germany and the United States. “We have reviewed the current status of our agreements with suppliers, taking into account the important investments we have made in recent years and that we will continue to make, to lay the foundations for future growth,” the letter continues, before adding that accepting the discounts would mean “stoking joint growth”.
Last July, the British company announced that it expected profits of a maximum of 35 million pounds (42 million dollars) for this 2019. A figure much lower than the 102 million pounds (123 million dollars) obtained the previous year and 55 million (66 million dollars) calculated in previous predictions. “The general overhaul of our infrastructure has been more rugged and has taken much longer than we originally anticipated. We recognize that this is a failure in execution,” said ASOS CEO Nick Beighton. So far this year, the company has lost 62% of its stock market value.