Editorial & Advertiser disclosure

Global Banking and Finance Review is an online platform offering news, analysis, and opinion on the latest trends, developments, and innovations in the banking and finance industry worldwide. The platform covers a diverse range of topics, including banking, insurance, investment, wealth management, fintech, and regulatory issues. The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.

Business

UK’s ASOS battling for turnaround in tough market

Published by Jessica Weisman-Pitts

Posted on November 5, 2024

Featured image for article about Business

By Sarah Young

LONDON (Reuters) -Britain’s ASOS said it was confident it would return to growth in 2025, but last year’s decline and tough competition showed the scale of the challenge the online fashion retailer is facing, sending its shares to their lowest in five months.

ASOS has been trying to reinvent itself for the last two years after it fell out of favour with its 20-something target customers and became bogged down with excess stock. Its turnaround plan has, however, coincided with the rise of lower cost Chinese-founded fast fashion giant Shein and Chinese online retailer Temu.

The company said on Tuesday it wrote off 100 million pounds ($130 million) of old stock in the financial year to Sept. 1 and its adjusted earnings fell by 36% compared to the previous year, with its number of active customers down by 16%.

Its shares traded down 8% in early deals, hitting their lowest level since May.

“This is a journey that takes some time,” Chief Executive Jose Antonio Ramos Calamonte told reporters, adding that the company’s historic stock problem was now completely behind it.

He said he was confident that the group was moving in the right direction with its prioritisation of profitable growth over volumes taking effect, and its focus on producing exciting new trends quickly starting to show results.

New product sales had risen 24% over the last three months compared to last year, he said, with burgundy a popular colour this autumn, and baggy jeans, oversized T-shirts and animal prints also selling well.

What we’re seeing is a company that, while making good progress in its strategy, is still suffering from large losses, weak customer metrics, and a balance sheet that has a bit of short term liquidity, but not necessarily gives reassurance for the medium to long term,” Shore Capital analyst Katie Cousins said.

For its financial year to September 2025, ASOS said it expects adjusted earnings (EBITDA) to jump at least 60% to between 130 million and 150 million pounds, up from 80 million pounds for 2024.

($1 = 0.7702 pounds)

(Reporting by Sarah Young; Editing by Sachin Ravikumar and Emelia Sithole-Matarise)