Despite having an array of celebrity fans such as Rihanna, Alexa Chung and even Michelle Obama, the online fashion retailer is in the midst of a serious rough patch with shares dropping by 68%.
Founded in 2000 the site was originally launched as a platform to sell fashion items seen in film and TV, hence the name ASOS standing for ‘As Seen On Screen‘. The British business has been hugely successful abroad with 60% of their sales being generated overseas. The retailer was at the top of its game with sky high profits and sales but a profit warning was issued back in March and more soon followed. ASOS competitors Boohoo.com and Miss Guided are hot on their footsteps with a number of loyal customers and fashionable products.
A fire in the retailers Barnsley distribution warehouse back in June this year had disastrous results costing the company up to 30 million in lost sales. The chief executive Nick Robertson is also currently facing an expensive divorce that could potentially result in him selling his stake in the company.
ASOS‘s main customer base tends to be made up of teens, students (thanks to the generous student discount) and twenty something‘s. One of the ways ASOS targets their customers is through promotions and offers however suppliers including well known brands are unhappy with how often their stock is sold at reduced prices. Their stock may be sold at a discount on ASOS but are sold full price in their own stores at the same time.
ASOS have set up a fix-it strategy that makes the online retailers less dependent on their Barnsley warehouse by opening up extra warehouses abroad. The business needs to keep up with its past years success by proving they are willing to makes changes to keep up with their customers needs and have the edge against their fast growing competitors.
