New Asos boss lays out 12-month turnaround plan as it swings to loss

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Asos swung into the red as it struggled against an “incredibly challenging economic environment”.

José Antonio Ramos Calamonte

Asos chief José Antonio Ramos Calamonte said: ‘I know we as a company can achieve far more’

The fashion retailer recorded an operating loss of £9.8m in the year to August 31, down from a profit of £190.1m the year before.

Group revenues inched up 1% to £3.93bn, largely driven by a 7% uptick in UK sales.

Asos said it has added to its customer base, up 5% for the year, while Premier customers grew 6% resulting in an average order frequency increase of 5%.

New Asos chief executive José Antonio Ramos Calamonte has laid out plans to revitalise the retailer in the face of macroeconomic headwinds, including reviewing its international plans and marketing.

He highlighted four areas the business will target over the next 12 months: renewing its commercial model to include shorter lead times and off-site stock clearance; optimising its cost base and supply chain; strategic investments to shore up the balance sheet; and fostering a new working culture to encourage innovation as well as making new senior hires.

Looking to the long term, the retailer added that it will be reconsidering its marketing strategy and data capabilities.

Following media reports last week, Asos confirmed that it has renegotiated its core banking covenants to ensure financial stability, with cash and committed facilities of over £650m at year-end.

For the year ahead, Asos said September 2022 trading has improved compared with August but that it is “difficult to predict” how customers will shop over the next 12 months.

Ramos Calamonte said: “Asos is a strong business with a compelling brand, customer offer and fashion credibility, with dedicated and passionate employees. Against the backdrop of an incredibly challenging economic environment, this unique combination has enabled our business to deliver a resilient performance this financial year in the UK – but I know we as a company can achieve far more.

“Today, I have set out a clear change agenda to strengthen Asos over the next 12 months and reorient our business towards the future. This includes a number of decisive, short-term operational measures to simplify the business, alongside steps to unlock longer-term sustainable growth by improving our speed to market, reinforcing our focus on fashion, strengthening our top team, and leveraging data and digital developments to better engage customers.

“On the basis of the actions I have set out today, the team and I will work resolutely to emerge from these turbulent times as a more resilient and agile business – all the time guided by our purpose, to give our customers the confidence to be whoever they want to be.”