Asos fashion giant suffered £15.8million
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Asos’s business boomed during the pandemic when it posted a pre-tax profit of £106.4 million. But, with the removal of restrictions, shoppers returned to physical stores. As a result, its revenues for the six months to the end of February grew just one per cent to £2 billion.
The internet retailer fell into the red because of higher freight costs, holding more clearance sales, restructuring charges, an £18.3 million hit for subletting part of its head office in Leavesden, Herts, the cost of moving its listing from AIM to the London Stock Exchange’s main market and costs linked to its 2021 takeover of Topshop.
However, shares ended the day up 4.81 percent at 1,612p.
With inflation squeezing household finances, Asos chief financial officer and chief operating officer Mat Dunn warned that its trading could worsen if shoppers start cutting back.
He said: “We remain mindful of the potential impact on demand from the growing pressures on consumer spend.”
Dunn has been in charge of Asos on a day-to-day basis since chief executive Nick Beighton left the business in October.
Shore Capital analyst Eleonora Dani said: “The business is still looking for its next CEO – who is expected to join and embrace the strategy presented to the markets in November; until then, it is challenging to have confidence in how the company will navigate the current environment.”
Matt Britzman, an equity analyst at Hargreaves Lansdown, said: “The broader online retail sector finds itself in somewhat of a sticky spot. The squeeze on finances will slowly start to feed into changing buying habits.
“When you add on the resurgence of high-street shopping and higher return rates, the goldilocks conditions seen last year are well and truly over.”
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