ASOS swings to loss as new CEO outlines 12-month turnaround plan
Due to a “weakening consumer environment,” fashion retailer ASOS reported a loss of £9.8 million for the year up until August 31, 2022, compared to an operating profit of £190.1 million in 2021.
It did note, however, that September had shown a slight improvement compared to August.
Compared to last year, revenues stayed constant at £3.9 billion while the gross margin declined 180 basis points from 45.1% in 2021 to 43.6%.
The company projects a loss for the first half of 2023, worsened by a high markdown to clear inventory, but expects the second half of the year to be helped by second-year declines in freight rates and cost-cutting measures.
José Antonio Ramos Calamonte, CEO of ASOS, stated that he is disappointed in the company’s key markets of the US, France, and Germany and that he will be refocusing on these countries. To increase novelty for customers, he will also implement a shorter-to-market model and reduce markdowns.
Going forward, ASOS plans to focus on updating its business model and inventory control, streamlining and lowering its cost structure, ensuring a solid and adaptable balance sheet and strengthening the leadership team.
Calamonte announced: “Today, I have set out a clear change agenda to strengthen ASOS over the next 12 months and reorient our business towards the future.
“This includes a number of decisive, short-term operational measures to simplify the business, alongside steps to unlock longer-term sustainable growth by improving our speed to market, reinforcing our focus on fashion, strengthening our top team and leveraging data and digital developments to better engage customers.”