Asos records £290m loss as UK sales drop by 10%

Asos has announced a £290 million pre-tax loss following weak sales results across the six months to 28 February.

The online fashion retailer said that the loss includes a £128.2 million stock write-off and £49.4 million worth of property impairments and closure costs after it streamlined its head office and logistics footprint.

The fast fashion brand revealed that sales in the UK dropped by 10 per cent during the period and by seven per cent in the US. European sales remained flat, while the rest of the world saw sales decline by 12 per cent.

Asos sales have been on the decline since August 2023, with the retailer blaming losses on accelerating inflationary pressures.

The company attributed slow sales in January and February to a challenging retail environment as online penetration declined year-on-year. It also blamed a reduced markdown, its decision to spend less on marketing, and actions taken to "right-size" stock.

Overall revenue was down by seven per cent, which it said was largely driven by a "challenging trading backdrop" and the company's "deliberate actions on capital allocation".

Last year Asos announced a new 2023 turnaround plan which includes measures to drive £300 million in profit.

The company also said it would cut 35 unprofitable brands from its platform during 2023, while winding down a storage facility in the UK, US, and EU.

José Antonio Ramos Calamonte, chief executive of Asos said that the roll out of its new commercial model, which delivered £100 million of profit optimisation and cost saving initiatives, impacted the company's "short-term sales growth" over the six-month period.

"We are improving our gross margin run rate in the face of significant headwinds, are starting to see the benefits of a repositioned stock profile, and are taking action to reduce the proportion of our sales which are not profitable," said the Asos boss. "Initiatives are in place to drive a further £200 million of benefit in the second half and I am very confident of our return to sustainable profit and cash generation in the second half of the year and beyond."

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