Coronavirus: Asda cancels clothing orders with suppliers
Asda has cancelled around a quarter of clothing orders with suppliers due to plummeting demand during the coronavirus crisis.
The supermarket has said it will pay 50 per cent for the completed cancelled orders, rising to 60 per cent for Bangladeshi suppliers.
Asda said it will honour more than 75 per cent of its orders for its George clothing brand and has invested in extra space to store products during the pandemic. Suppliers will also be paid within seven days.
Asda, which is owned by US retail giant Walmart, has agreed for suppliers to donate or resell clothes from cancelled orders.
Major UK retailers such as Primark and Topshop owner Arcadia have cancelled supplier orders after non-essential stores were closed under coronavirus lockdown rules.
However, Asda’s decision has angered some suppliers as the George range is still on sale in Asda stores, which have remained open throughout the UK’s coronavirus lockdown.
“Their behaviour is totally unacceptable,” one supplier told the Sunday Times. “It is ridiculous for a company the size of Walmart not to pay for orders.”
“Covid 19 has had a significant impact on the global fashion industry – with a severe downturn in the demand for clothing and also factory closures resulting from isolation requirements,” an Asda spokesperson said.
“We have long standing and valued relationships with our suppliers and want to help them weather this crisis and be in the best place possible to continue working with us once this crisis has passed.
“We have been in close contact with our suppliers and advised them that we intend to honour our commitments on over 75 per cent of our George orders.
“However, where there is product that we are not able to sell at this time we are offering to mutually cancel the order and pay a proportion of costs within 7 working days, as well as agreeing suppliers can resell items or donate them.”