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25 March 2013 | Adam Leach
Retailer Laura Ashley has asked suppliers for a 10 per cent discount on orders, including those already placed, in a move described as “verging on blackmail” by a small business group.
In a letter sent to the fashion and furnishings firm’s supply chain, that was passed on to the BBC, the high street chain - which is owned by Malaysian firm MUI Group - requested an immediate discount of 10 per cent from all suppliers. The letter explained increased competition and consumer choice was driving down prices, meaning the company must in turn reduce its own costs. The company also said by getting the discount, it would not need to review its supply base.
The Forum of Private Business, which campaigns on behalf of small businesses and suppliers, attacked the retailer’s decision. Robert Downes, spokesman at FPB, said: “We thought we'd seen it all, but this really takes some beating. Not only are they demanding a 10 per cent cut, and even on orders already submitted, but the implied threat is that suppliers who don’t conform will be ditched. This goes beyond bad practice, it’s verging on blackmail.”
In a statement regarding the letter, Laura Ashley, said: “We have very strong and long-term relationships with our suppliers and always have done. 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.”
Earlier this month, retailer Debenhams sent a letter to its linen suppliers requesting a discount in return for settling invoices more quickly. The retailer said this was the action of a single buyer and that it would not affect any suppliers, other than the 11 that had been contacted.