Asos’ suppliers have begun cutting ties with the embattled online fashion retailer after credit insurers withdrew cover amid concerns over its falling profits (according to The Times). ASOS founded in 2000 was known as a trailblazer for fast-fashion thanks to its target of twentysomething, smartphone shoppers and its swift service, which helped it to outstrip bricks and mortar competition.
Valued at over £7bn just more than 2 years ago was relegated from the FTSE 250 Index last week, signifying the reversal in its fortunes in recent years. In the past weekend news emerged that Asos had received a £1billion approach from Turkish online retailer Trendyol, which is backed by Chinese giant Alibaba, late last year. The deal would have valued the etailer at between £10 and £12 a share, substantially higher than the £3.50 they are now valued at.
Meanwhile Mike Ashley’s Frasers Group has built its stake in Asos to almost 9% – taking him close to the ability to block a takeover bid – ahead of a potential battle for control of the ailing online fashion business (it makes him the 3rd largest shareholder in the ASOS business).
Ashley, the founder of Sports Direct, who has a long history of snapping up ailing brands, from House of Fraser to Everlast, has moved to gain influence at Asos. Its share price has fallen 63% since February amid falling sales and a slide into the red as the pandemic-induced online shopping boom slowed.
Ashley faces stiff competition in the form of fashion entrepreneur Anders Povlsen, the owner of Denmark’s Bestseller chain who is also a major shareholder in German online fashion seller Zalando and Scotland’s largest landowner.
