The much-vaunted turnaround at Asos may take longer to deliver than expected.
That is the main conclusion to be drawn from the results and trading statement published on Wednesday by the online fast-fashion specialist.
Jose Antonio Ramos Calamonte, who joined Asos in January 2021 as chief commercial officer following an 18-year career in retail that included stints at Zara’s parent company Inditex and Carrefour, became chief executive in June last year following a period during which it had gone without a permanent CEO for eight months.
Four months later, he unveiled a turnaround plan, promising to “strengthen Asos over the next 12 months”.
Unfortunately, that may have created the impression among some investors that a turnaround could be executed relatively quickly, not least because Asos has been talking about “refreshing its strategic priorities” since as long ago as November 2021.
Asos shares fell by nearly 19% today, wiping out all of the gains the price has made this year, as the red ink continued to flow liberally across the accounts.
A pre-tax loss of £290.9m for the six months to the end of February was up from one of just £15.8m for the same period a year earlier.
Sales for the period were down 8% to £1.84bn. Net debt jumped from £62.6m to £431.7m. And there was a free cash outflow during the period of £262.7m.
One had to look closely at the statement to find evidence of much going right.
The number of active customers fell by 7%, to 24.9 million, while the number of total orders shipped fell by 14% to 43.2 million. On the plus side, customers who stuck with Asos during the period are placing orders slightly more frequently, as well as spending more.
According to the company, though, some of the setbacks were due to deliberate actions to improve profitability.
Part of the…
