Discount Trigger "Murder Case": ASOS Faces Supplier Exit Threat

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Net Xiaobian introduced to everyone is the discount triggered a "murder case": ASOS is facing the threat of supplier exit.

ASOS PLC (ASOS.L) is in a grim situation. According to the Daily Telegraph on Sunday, many British apparel retailers complain that products are severely discounted on the ASOS website, especially during the Christmas season last year, which undoubtedly affects the brand image. Therefore, these retailers threaten ASOS to quit and no longer supply ASOS website products.

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The threat is unlikely to work. Last week, ASOS released its four quarter earnings report and issued a profit warning for the fiscal year. At the same time, ASOS announced that it would take price cuts in the international market to reverse its weak international market sales.

At present, although no retailers really exit ASOS, these fashion retailers only allow ASOS to sell their products in the UK market, but not ASOS in the international market.

According to an unnamed retailer executive who accepts Telegraph, if the ASOS continues to discount, Next PLC (NXT.L)'s website and catalog mail order service will be another option for "disappointed retailers".

As for suppliers' complaints, ASOS responded that ASOS would not comment on brands and customers, nor would it comment on the relationship between ASOS and them.

ASOS has been warned by some analysts for its dependence on selling other retailers' brands.

Some analysts believe that the pattern of online retail market has changed radically, and more and more brands are starting to operate their own e-commerce. ASOS, a multi brand third party distributor, will bear more and more pressure on business and profitability. The prospects for N Brown and Boohoo.com are all private brands.

The price of ASOS PLC (ASOS.L) has fallen to nearly 68% so far this year. In 2014, it was a year when the ASOS bubble burst, and ASOS's own strategy, storehouse fire, founder's divorce and other "natural and man-made calamities" also accelerated the pace of ASOS sliding towards the abyss.

Monday opening, ASOS PLC (ASOS.L)

A drop of 4%, the lowest to 1954 pence, fell below 2000 pence mark and hit a 2 year low. The deadline was no longer available for fashion Chinese net. The decline narrowed to about 1.6% pence 2001 pence.