Credit insurer slashes cover for Asos suppliers amid falling profits
A credit insurance provider has reportedly cut its cover for Asos suppliers as concern over the retailer’s recent falling profits continues to mount.
Atradius is understood to have reduced its cover a few weeks ago, Drapers reported, following Asos’ most recent financial statement published in January.
The e-commerce company reported an eight percent drop in UK sales and stated that it also expected to see a H1 FY23 loss, driven by profit phasing, inflation headwinds and annualisation of elevated return rates.
Speaking to the publication on the insurance cuts, Asos said it had “not seen any adverse impact on trading relationships with our suppliers”.
A spokesperson for the retailer told Drapers: “Trade credit insurance cover remains a live issue for the wider industry.
“We have not seen any adverse impact on trading relationships with our supplier due to changes to cover.
“We stated in our latest trading update in January that we have retained financial flexibility with cash and undrawn facilities of circa 430 million pounds.”
The move follows a string of similar cuts across the e-commerce industry, as credit insurers become increasingly cautious about retailers.
Most recently, the suppliers of beauty retailer THG and fast fashion group Boohoo were also reported to have seen insurers cut cover, again as a response to falling profits.