Asos sales plunge as it plots revival in fight with Shein
SALES have plunged almost a fifth at Asos as it races to stage a turnaround amid mounting competition from Chinese rival Shein.
The British fashion retailer reported an 18pc drop in sales for the first half of its financial year as chief executive José Antonio Ramos Calamonte focuses on returning the company to profit.
Asos has been significantly reducing the products it stocks in an attempt to bring an end to what it has termed its “infinite aisle” of clothes.
Instead, Mr Calamonte is aiming to make Asos quicker at reacting to trends by launching smaller runs of products that it can get online within two or three weeks of designing ranges.
If they are successful, it then would order more, so it is not holding too much older stock that it has to discount.
Asos said this drive to make itself more profitable would result in sales falling by between 5pc and 15pc this year. Shares closed up more than 9pc yesterday as investors gave their approval to the plan, although the stock is down 48pc in the past year.
It is under growing pressure to deliver more of what its customers want amid fierce competition from fast fashion rivals. Recent figures from Globaldata suggest Asos has been losing its grip on the UK clothing market, with its share falling from 3.62pc in 2021 to 3.07pc in 2022.
Chinese rival Shein has been rapidly expanding in the UK by luring in new customers with ultra-low prices. It sells dresses for less than £5 and jeans for under £7. Shein’s UK sales rose above £1bn in the 16 months to December 2022, helping it make a £12.2m profit.
Globaldata figures suggest Shein, with 2.2pc of the UK clothing market, will continue to attract shoppers and is poised to overtake Zara.
Mr Calamonte said Asos was taking steps to become “a faster and more agile business”.