Asos’ UK sales fell eight percent year on year in the four months ending in December with the company blaming “weak consumer sentiment” for the decline.
The company has announced a £300 million package of “cost-cutting measures” as it battles raging inflation and dwindling consumer demand.
This includes shutting down three “ancillary storage facilities” in the second half of this fiscal year, “rationalising” office space, and removing 35 unprofitable brands from the Asos platform by the end of the first half of the current fiscal year.
It follows a previous decision to cut staff costs by 10 percent through a series of layoffs.
Despite this, Asos said it was “confident” that it would see “significant improvement in profitability” in the second half of the 2023 financial year.
Outside of Europe and the United States, revenue fell by 31 percent to £130 million, with the company blaming the drop in sales on weaker consumer sentiment, Royal Mail strikes, and disruption in the delivery market, which resulted in earlier cut-off dates for Christmas orders.
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Asos boss José Antonio Ramos Calamonte said: “We are undertaking necessary strategic and operational changes, with our focus shifting from prioritising top-line growth to building a more relevant and competitive fashion business with a disciplined approach to capital allocation and ROI,”
“We have made good early progress against a number of measures to simplify the business, including re-positioning our inventory profile, reviewing our operational model in our top markets and reducing our cost base. While there is more to do, I am pleased by the progress made in this period and am confident in the direction we are going.”
Source: Retail Gazette