Asos reveals widened losses amid overhaul and slumping sales
The online fashion firm reported losses of £290.9 million for the six months to February 28 compared with losses of £15.8 million a year earlier.
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.Retailer Asos has said it slumped to a hefty half-year loss amid a major restructuring and sliding sales, as cash-strapped consumers cut back on their spending.
Shares in the online fashion firm slumped 10% in morning trading on Wednesday as it reported losses of £290.9 million for the six months to February 28 compared with losses of £15.8 million a year earlier.
It came as sales fell 10% on a constant currency basis to £1.8 billion, but losses were also widened by stock write-offs, property impairments and the cost of warehouse closures, as well as moves to trim its office space.
The sales woes picked up pace in the second quarter, with a 15% fall excluding Russia, which has continued into March and April, according to Asos.
The group said around half of the fall reflected deliberate moves to focus on profitable sales.
I am pleased with the strategic and rapid operational progress the business has made in the first half of the financial year, against some very challenging trading conditions
Asos predicts that, assuming there is no pick-up in consumer spending conditions, sales will drop by a “low double-digit” over the full year, excluding the impact of its withdrawal from Russia.
But it said it is confident of returning to “sustainable profit” in the second half of its year.
Jose Antonio Ramos Calamonte, chief executive of Asos, said: “I am pleased with the strategic and rapid operational progress the business has made in the first half of the financial year, against some very challenging trading conditions.”
He added: “While some of these changes have impacted short-term sales growth, there are many causes for optimism as we progress through the second half of the year.”
“I am very confident of our return to sustainable profit and cash generation in the second half of the year and beyond.”
The firm recently disclosed further details of its ongoing turnaround plans and aims to drive more than £300 million of profit and cost savings measures this financial year.
It said in January it would shut three storage warehouses in the UK, Europe and the US, while it is also trimming some of its office space, but not closing sites.
Asos is also axing 35 unprofitable brands.
It comes amid a wider overhaul to turn around its fortunes under Mr Ramos Calamonte.
This includes better stock management, cost cutting, a review of its flagging international businesses and updating the group’s culture, including a leadership team reshuffle and new hires.
Asos has also said that it is cutting jobs to save about 10% in staff costs, with about 100 jobs going.
The firm recently said it has pushed through low-single digit percentage price hikes to help offset inflation pressures, while it has also increased delivery prices, introduced or increased minimum order values for free delivery across its global operations and hiked subscription costs.