Asos makes loss amid warning over Russia exit
Online fashion retailer Asos expects to take a £14 million hit from its decision to stop selling clothes in Russia.
The prediction came as the UK group, whose name stands for As Seen On Screen, revealed it sank to a pre-tax loss for the six months to the end of February, spending heavily on an overhaul to win over more customers longer term.
Sales still rose by 1 per cent to £2 billion in the sixmonth period but a £106.4 millionpre-taxprofitin2021 turned to a £15.8m pre-tax loss.
The firm said it felt the effects of supply chain disruption and limited stock availability and expects the next six months to be more challenging due to inflationary pressures.
But bosses were hopeful that sales growth will accelerate this year, highlighting improvements in stock levels,a return of event and holiday-led demand and an ea sing of supply chain issues.
Losses were attributed to £30.6m spent on upgrading the business.
In the UK, sales grew 8 per cent to £895.5m, although the company admitted it missed out on sales for events in January. Sales in Europe were up just 1 per cent to£577.4m,w here there was greater impact from supply chain problems and Covid-19 restrictions - particularly in France.
Neil Shah, director at Edison Group, said: “One of the high-flyers of the pandemic, Asos’[first-half]resultssend the online fashion retailer crashing back down to earth.
"Driving international expansion is a key priority for the fashion retailer and accessing new markets may well be crucial to compensate for pressures caused by a difficult environment in Europe.”