Asos profit plummets
Fashion giant’s CEO says he underestimated impact of operational change
Full-year profits at online clothing retailer Asos have fallen by 68 per cent, after the company invested in global expansion.
Profit before tax was down from £102m for the 2017-18 financial year to £33.1m for the year to April. Turnover rose by 13pc to £2.7bn. The company had issued a profit warning in December 2018 and a second in July 2019 due to problems in Germany and US warehouses.
Nick Beighton, said the company had “underestimated the impacts of large scale operational change being executed on two continents simultaneously”.
“With the benefit of hindsight, we were not adequately prepared for the additional complexities of planning and trading across our expanded warehouse footprint,” he added, admitting that the company “lost focus on several of our core competencies, notably product, presentation and customer engagement”.
He said Asos had made “substantial progress” resolving the problems in the last few months. Well over half (60pc) of the clothing giant’s revenues now come from international customers. Mr Beighton said the company is now “well positioned to take advantage of the global growth opportunity ahead of us”.
“Whilst there remains lots of work to be done to get the business back on track, we are now in a more positive position to start the new financial year. Our focus now shifts to ensuring that we enhance our capability to drive an improved customer experience and leverage the benefits from the investments we have made,” he said.
Asos shares have lost more than half their value in the past year due to poor news from the company. They rose in early trading.