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A Year to Forget for ASOS

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Online fashion retailer, ASOS, is hoping its latest Autumn/Winter collection can save its wretched year with a range of interactive YouTube music videos.

Five months on from the massive fire which gutted the Barnsley distribution and damaged £30 million worth of stock, ASOS are trying to rebuild.

The videos have been created with a new partnership with Virtue Worldwide, a creative agency brought in to try and turn the company’s fortunes around.

Featuring an unreleased track by girl band Juce, the video needed shot five times with different backdrops to allow for the seamless switch.

2014 has not been a year to write home about for the company founded in the wake of the dotcom bust way back in 2000.

The fire in June came at a time when its share price, which had reached a record high in February, was in rapid decline.

In the space of eight months the value of its shares has more than halved with the current share price sitting at 2,490.

This is just above the level that it was trading at in 2011, wiping out two years worth of growth.

“All the things that were positive for us have come back and bitten us,” said chief executive Nick Robertson describing the circumstances the retailer has faced this year as a “perfect storm”.

The third slice of bread in this stale club sandwich of a year is the fall in profits. Pre-tax profits for the year to 31 August fell to £46.9m which constitutes an overall from of 14%.

The strong pound and the warehouse fire are blamed as key reasons for the decline but other clothing retailers have felt the hit as well with Topshop and Marks and Spencer both feeling their own dip in profits.

The one crumb of comfort that ASOS can take this year is that their overall sales grew 27% and UK sales grew 35%.

Robertson explained why the year may not be as bad as it has appeared, saying: “We are in a period of major investment that comes at a short term cost, but the medium-term benefits will be significant.

“ASOS has always been about the longer journey to a very big prize: to be the world’s leading fashion destination for 20-somethings, and we are firmly focused on our next staging post of £2.5bn sales.”

Published on Friday 14 November by Editorial Assistant
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