Asos Plc sales fell during the approach to Christmas as weaker consumer sentiment and UK delivery disruptions hurt orders at the fast-fashion retailer.
(Bloomberg) — Asos Plc sales fell during the approach to Christmas as weaker consumer sentiment and UK delivery disruptions hurt orders at the fast-fashion retailer.
The final four months of the year were “volatile,” with revenue down 3%, excluding Russia, Asos said Thursday. UK sales declined 8%, and the company still expects a loss in the fiscal first half after discounting and writing off stock.
Chief Executive Officer Jose Antonio Ramos Calamonte has led an extensive overhaul since taking over in June, in a drive that includes reducing stock, slowing automation and cutting spending. The retailer expects a decline in the UK apparel market this year as consumers pull back from non-essential purchases with bills rising for food, energy and fuel.
Asos shares fell as much as 4.4% in early London trading, before recovering its losses. The stock lost more than three-quarters of its value last year.
The retailer is battling to stay relevant, with reduced consumer confidence undermining demand for party dresses and skinny jeans. The company reiterated that free cash flow this fiscal year would be zero at best with the business generating cash again in the second half.
Asos said it has identified more than £300 million ($364 million) in “profitability measures” that will show benefits mostly in the second half.
The retailer is seeking to hire a chief financial officer after Mat Dunn departed in October and with interim CFO Katy Mecklenburgh set to leave. At the same time Asos has a £350 million revolving credit facility coming due next year and will need to start refinancing talks with lenders soon.
The company has talked with lenders about hiring a restructuring expert and has held talks with a number of turnaround professionals about a role, Bloomberg reported last month.
(Updates with share reaction in fourth paragraph)
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