Online clothing retailer Asos claimed that operational adjustments would assist the company’s current financial year benefit by £300 million, giving the firm a much-needed boost after holiday sales dropped.
Asos’s profits plummeted after the end of pandemic restrictions and as a result of a number of operational issues, so José Antonio Ramos Calamonte, the company’s new chief executive who assumed control last year, is working to revamp the company’s business model and win back its 20-something fashion-conscious customers.
Asos reported an 8% decline in sales in Britain, its largest market, during the period, hit by shipping issues around Christmas and a difficult comparison to last year, when the pandemic favoured online retailers.
Asos stated in a statement on Thursday that it had discovered cost- and profit-saving strategies that might increase its current fiscal year revenue by more than £300 million ($364.35 million) through actions including getting rid of unproductive brands and closing storage facilities.
On the promise of these improvements, the stock increased 14%, reaching highs last seen in November, yet it has still lost 70% of its value over the past 12 months.
Analysts at Liberum criticised recent trade as being lacklustre, noting that “progress on new approach” had been made, “but we remain concerned.”
Britain is experiencing a cost-of-living crisis, and Asos blamed low customer confidence for its decline in UK sales. However, several other businesses, including clothing giant Next, were able to increase sales throughout the holiday season, demonstrating that Asos has more difficulties than most.
More than a dozen days of postal walk-outs over the last months of 2022 crippled Britain’s delivery system, making customers prefer to shop in-store rather than worry about deliveries.
Physical stores have benefited as well from the pandemic’s termination. According to IMRG data, internet retail sales in the UK decreased in 2017 for the first time ever, dropping 10.5 percent year over year.
Asos did better in Europe, with sales increasing by more than 6 Asos throughout the time frame.