Business

Asos reports 3% drop in revenue as demand weakens

Physical shops outperform online retailer during key period as consumers favour in-store purchasing

Asos said UK sales were down 8% during the final months of 2022. Photograph: PA Wire

Thu Jan 12 2023 - 08:39

Online fashion retailer Asos reported a 3 per cent fall in revenue over the four months to the end of December, hurt by weaker demand and delivery disruption in its biggest market, Britain, and making it one of the laggards in the sector.

Britain is in the midst of a cost-of-living crisis but rival retailers with physical shops such as Next outperformed Asos in the period as consumers prioritised festive spending and chose to visit stores rather than worry about delivery issues.

Asos said UK sales were down 8 per cent in the period, which it blamed on weak consumer sentiment, earlier cut-off dates for Christmas deliveries due to the delivery problems, and a tough comparison against last year when the pandemic favoured online.

José Antonio Ramos Calamonte, Asos’s chief executive who took over last year, aims to overhaul the company’s business model after profits dived following the end of pandemic restrictions and after a string of operational problems.

READ MORE

Britain’s delivery network was hamstrung during the final months of 2022 by more than a dozen days of postal walkouts.

Illustrating the challenge for online-only retailers, data from IMRG showed that online retail sales in the UK fell for the first time last year, down 10.5 per cent year-on-year, partly because shops opened up after Covid-19 closures.

Asos said in its statement on Thursday that it was making good progress with its plan to improve profitability, although it would make a loss in the six months to the end of March. European sales grew 6 per cent in the period. – Reuters

LATEST STORIES