ASOS posts widened losses as it continues turnaround strategy
Online fashion retailer ASOS has reported widened full year losses as it continues to implement its turnaround strategy.
In the year to 3 September, revenue was down 11% to £3.5 billion as the retailer posted a pre-tax loss of £296.7 million compared to a loss of £31.9 million in the prior year.
However, ASOS said its turnaround strategy is working due to second half adjusted EBIT rising by more than 100% on the previous year after improvements in core profitability and strong inventory management.
ASOS will now be prioritising a shift to a ‘Back to Fashion’ strategy where it will offer the “best and most relevant product, styled in the ASOS way”.
José Antonio Ramos Calamonte, chief executive of ASOS, explained: “FY23 was a year of good progress for ASOS in a very challenging environment and I am proud of what the business has achieved. We have reduced our stock balance by c.30%, significantly improved the core profitability of the business, strengthened our balance sheet, and refreshed our leadership team.
“Encouragingly, stock that was brought in under our new commercial model over the summer months has performed strongly and this gives us the confidence to accelerate the rollout of our new processes. As such, we are taking decisive action in FY24 to clear stock brought in under our old model while substantially improving our speed to market and investing in our brand, reminding our customers what we’re really about: fashion.”
ASOS expects to posts a sales decline of 5% to 15% in the current financial year as the clearing of old stock remains a drag on sales growth. The retailer is predicting a return to growth in the following 12 months with an EBITDA margin of pre-Covid levels.
