// Asos is planning to write off between £100m and £130m of out-of-fashion inventory to help refresh its brand
// The rise in wanted stock partly reflects an increase in customers returning unwanted items amid the cost of living crisis
Asos has moved to overhaul its operations after posting a full-year loss in October, The Times has reported.
Asos posted a £9.8m full-year operating loss blaming “supply chain disruption and macroeconomic challenges” while last year, it made a £190.1m operating profit.
In a bid to recover, the online fashion giant and owner of the Topshop and Miss Selfridge brands is scaling back discounts, with plans to write off between £100 million and £130 million of out-of-fashion inventory to help refresh its brand.
Inventories rose to almost £1.1 billion at the end of August, its year-end, from £807 million.
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The rise partly reflects an increase in customers returning unwanted items, which new boss José Antonio Ramos Calamonte attributed in part to a shift from sales of casual wear during Covid-19 lockdowns to more formal wear as people returned to the office.
As part of the shake-up, Asos plans to operate a “shorter buying cycle with an accelerated speed to market, facilitating an enhanced customer proposition that offers new products, more regularly”.
It is aiming to do this by introducing more off-site “clearance routes” that will help it to clear stock earlier and reduce inventory held in warehouses, “which in turn will reduce the volume that is currently sold on promotion via the Asos site”.
Back in October, Calamonte highlighted issues such as Asos becoming “excessively capital intensive, too complex and overstretched globally”, which he said had resulted in “a lack of meaningful growth and scale” in its key international markets of the US, France and Germany.
He pointed out that its investment in a multi-region supply chain network in the US had “increased cost and complexity” and was not fully offset.
Therefore, it will revisit its approach to resource and capital allocation.
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