Business

Laura Ashley accused by FPB of 'supplier squeeze'

Laura Ashley is a fashion and furniture retailer
Image caption The firm has more than 200 stores across the UK

Furniture and fashion retailer Laura Ashley has been accused by support group the Forum of Private Business (FPB) of squeezing its suppliers.

A letter from the firm seen by the BBC asks for an "immediate cost price reduction of 10%" from suppliers, including on orders already placed.

The FPB said it was a "lazy and destructive" way of doing business.

But Laura Ashley said it had "very strong and long-term relationships with our suppliers and always have done".

A statement from the firm added: "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."

'Choice'

The retailer has more than 200 stores across the UK and is set to announce its full year financial results on 28 March.

Earlier this month the FPB accused John Lewis of being "greedy" after it was revealed the High Street retailer had a scheme in place to ask for a rebate from suppliers who see an increase in sales through its stores.

The Laura Ashley letter to suppliers says that "the UK consumer has never had more choice" and that retail prices are "continually being driven down with increased promotional activity and the advent of online-only retailers."

The letter, sent two weeks ago, continues: "With this in mind, we are requesting an immediate cost price reduction of 10%. We feel this is both fair and equitable and will save us a process of reviewing our supplier database.".

A spokesman for the FPB said the requested cost reduction was "a huge amount".

"In fact it probably means in many cases the supplier is making no profit or even operating at a loss," they said.

The forum said that the fact Laura Ashley was "asking for the 10% cut on orders already placed just adds insult to injury".

More on this story

Related Internet links

The BBC is not responsible for the content of external Internet sites