Asos CEO José Antonio Ramos Calamonte remains optimistic about the company’s future despite an 18% fall in UK orders.
- The company’s revenue dropped 18% to £2.9bn, with a £331.9m operating loss.
- A joint venture with Heartland saw Asos sell a 75% stake in Topshop and Topman for £135m.
- New strategies include a “test and react” model and a £3.95 return fee for frequent returners.
- Despite competition, the CEO is confident in Asos’s online business model, focusing on efficiency and consumer engagement.
Despite facing an 18% decline in orders within the UK, Asos CEO José Antonio Ramos Calamonte remains hopeful about the e-tailer’s plans to turnaround its financial performance. Clearly acknowledging the challenging situation, he stands firm in his belief in Asos’s online business model. After all, Asos’s revenue fell by a significant 18% over the fiscal year, amounting to £2.9bn, while operating losses reached £331.9m due to weakened consumer demand and intense competition from fast fashion and resale markets.
Adding to the financial landscape, Asos’s share prices dropped by 6% following these reports. Ramos Calamonte, however, refutes speculation about reviving physical Topshop stores, although he acknowledges that a physical presence may not be entirely off the table for the future. Earlier, Asos sold a 75% stake in Topshop and Topman for £135m to form a joint venture with Heartland, connected with the Holch Povlsen family’s Bestseller brand, while retaining a 22.5% stake itself.
In a bid to adapt, Asos has introduced new strategies, such as a ‘test and react’ drop-shipping model, significantly halving stock levels from £1.1bn in 2022 to £520m. By doing so, they have managed to turn stock into cash, addressing the massive challenge of reducing 60 million units. Moreover, the company has recently implemented a £3.95 return fee targeting ‘repeat returners’, which has begun to show promising results with a 1% reduction in return rates within a mere month.
Ramos Calamonte stresses the importance of preparing for upcoming demand, especially given the volatile market and the ongoing pressures from the cost of living crisis. Additionally, Asos has adeptly shifted its focus to ready-to-wear collections, catering to a diverse demographic spanning teenagers to older millennials. Confidence in handling peak seasonal demand remains high, despite rising competition from firms like Shein and Vinted.
Facing future fiscal changes, such as the rise in National Insurance from 13% to 15% by April 2025, Calamonte remains unperturbed, considering it negligible compared to other challenges the company has overcome. Furthermore, Asos’s CEO asserts the importance of cost reductions in warehousing and distribution, reinforcing their commitment to optimizing efficiency in operations.
José Antonio Ramos Calamonte’s confidence in Asos’s strategies highlights a path of resilience and adaptability in a highly competitive retail landscape.
