Amidst mounting financial challenges, Asos CEO José Antonio Ramos Calamonte remains undaunted by competition from firms like Vinted and Shein.
- Despite reporting a significant full-year loss of £379 million, Calamonte stresses Asos’ strong positioning within the fragmented fashion market.
- Calamonte highlights the importance of focusing on delivering quality customer service rather than being distracted by competitors.
- The company plans to maintain its focus on a younger demographic, doubling its ‘test-and-react’ model next year to meet consumer demand for new fashion.
- Sales of new product lines reflect Asos’ adaptability, with a 24% increase in sales year-on-year, suggesting a successful turnaround strategy.
Asos, one of the major players in the online fashion industry, faces financial hurdles with a recently announced £379 million loss. However, CEO José Antonio Ramos Calamonte remains confident in the company’s ability to thrive amidst fierce competition from rivals like Vinted and Shein. He asserts, “this is an incredibly fragmented market,” emphasising that the diversity within the industry leaves ample room for companies to succeed, provided they focus on their service quality.
Calamonte’s approach focuses on Asos’ core strengths rather than the competition. He acknowledges the rise of competitors but insists that Asos’ priority is doing “the best job possible” for its customers. The CEO is convinced that rather than worrying about others, the key is internal excellence and innovation. He states, “We are not worried about Vinted or about anyone else out there. We worry about ourselves.”
Despite Shein’s rise, particularly among Gen Z due to its low pricing strategy, Calamonte reaffirms Asos’ commitment to its business model, which he describes as a “winner.” This model incorporates a curated, trend-led offer and a diverse range of third-party brands like Arket, On, and Nobody’s Child, alongside Asos’ own products.
The company is not shifting towards an older demographic, despite Shein’s popularity among younger consumers. Instead, Asos plans to double its ‘test-and-react’ model, which accounts for 10% of own-brand sales, aiming to increase it to 20% in the next financial year. This model caters to younger consumers, reinforcing Asos’ strategic focus.
Calamonte believes that recent performance indicates the success of Asos’ turnaround. The company saw a 24% increase in ‘newness’ sales year-on-year with only a 6% increase in stock levels, suggesting strong customer demand for full-price items. Despite acknowledging the market’s volatility, Calamonte is optimistic about Asos’ capacity to adapt to changing demands and deliver what customers desire.
Despite challenges, Asos remains committed to its strategic path and optimistic about its future in the rapidly evolving fashion industry.
