Asos has posted a £9.8m full-year operating loss blaming “supply chain disruption and macroeconomic challenges”.
Asos’ new chief executive officer, José Antonio Ramos Calamonte, has promised to “refresh the culture” at the online fashion business after it plunged to an operating loss of almost £10m for the year. Last year, made a £190.1m operating profit.
He highlighted issues such as Asos becoming “excessively capital intensive, too complex and overstretched globally”, which he said had resulted in “a lack of meaningful growth and scale” in its key international markets of the US, France and Germany. He pointed out that its investment in a multi-region supply chain network in the US had “increased cost and complexity” and was not fully offset.
Calamonte unveiled his 12 month turnaround plan, which will focus on both a number of “decisive, short-term operational measures to simplify the business, alongside steps to unlock longer-term sustainable growth”.
He also highlighted how Asos had historically underinvested in marketing and had focused more than 80% of spend on performance marketing, leaving insufficient spend on driving longer-term awareness.
He said that had led to it becoming increasingly reliant on the use of markdown and promotions as a tool to attract customers, which had resulted in reduced newness for customers and contributed to the erosion of gross margin in recent years.
Calamonte said the implementation of the new commercial model and structure will enable Asos to operate a shorter buying cycle, enhancing speed to market and improving curation.
