Asos reports a significant financial loss but remains optimistic about future growth.
- Losses surged to £379.3 million over the past year with an 18% decrease in sales.
- The company focuses on a ‘sustainable, profitable growth’ strategy despite financial setbacks.
- CEO José Antonio Ramos Calamonte expresses confidence in the new commercial model’s performance.
- Stock management strategies show promising signs, contributing to operational efficiency.
Asos, the renowned online fashion retailer, posted a substantial pre-tax loss amounting to £379.3 million for the year ending 1 September, marking a rise from the previous year’s £296.7 million loss. Sales dropped by 18% to £2.9 billion, signalling significant challenges faced by the company. Despite these financial troubles, Asos remains committed to achieving ‘sustainable, profitable growth’. This ambition includes initiatives such as launching a loyalty programme aimed at enhancing customer engagement.
José Antonio Ramos Calamonte, CEO of Asos, shared insights into the company’s performance, noting the positive results of their new stock. He remarked, “We have already seen the green shoots in the performance of our new stock in recent months,” indicating confidence in Asos’s new commercial model. This approach is expected to drive improvements in gross margins back towards 50% in the medium term, reflecting a forward-looking strategy focused on customer satisfaction and timely product offerings.
One of the brighter aspects of Asos’s strategy has been its adjusted EBITDA, which reached £80.1 million, aligning with the upper end of market expectations. The company’s strategic shift emphasized inventory reduction, leading to a remarkable 50% decrease since the last financial year. This has resulted in fresher stock, meeting customer demand more effectively.
Calamonte emphasised the improved condition of their product offerings, stating, “Our product is now in the strongest position it has been in years.” He highlighted the significant reduction in aged stock by approximately 75%, with over 80% of items now being less than six months old. This development aligns with Asos’s focus on operational efficiency and profitability.
Looking ahead, Asos plans to expand its ‘Back to Fashion’ strategy by incorporating new brand partners and enhancing customer experiences. The company aims to broaden its ‘test and react’ model to encompass 20% of its own-brand sales. A standalone site for Topshop is also in the pipeline, reflecting Asos’s efforts to strengthen its market presence.
The retailer is optimistic about generating significant profit improvements in H1 FY25 and the full financial year through an increased mix of full-price sales and strategic actions to enhance order economics. Calamonte noted, “With these solid foundations in place, we can focus on delivering experiences that delight our 20 million customers,” demonstrating a commitment to both innovation and customer-centric strategies.
Asos navigates financial challenges with a focus on strategic growth and operational efficiency.
