// Asos plans to cut office and warehouse space after UK sales dip 8%
// Asos said it was “confident” that it would see “significant improvement in profitability” in the second half of the 2023 financial year.
Asos’ UK sales slipped 8% year on year in the four months into December 31, with the online fashion retailer blaming “weak consumer sentiment”.
As a result, the business said it had implemented a £300 million package of “cost mitigation measures” as it battles raging inflation and dwindling consumer demand.
This includes the winding down of three ‘ancillary storage facilities’ in the second half of this year, rationalising office space and removing 35 unprofitable brands from the Asos platform by the end of the first half of this financial year.
It comes on top of a previous decision to reduce staff costs by 10% through a series of layoffs.
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Despite this, Asos said it was “confident” that it would see “significant improvement in profitability” in the second half of the 2023 financial year.
Sales outside Europe and the US sunk by 31% to £130 million as the business blamed the downturn in sales on weaker consumer sentiment, Royal Mail strikes and disruption in the delivery market which resulted in earlier cut-off dates for Christmas orders.
Asos boss José Antonio Ramos Calamonte said: “We are undertaking necessary strategic and operational changes, with our focus shifting from prioritising top-line growth to building a more relevant and competitive fashion business with a disciplined approach to capital allocation and ROI,”
“We have made good early progress against a number of measures to simplify the business, including re-positioning our inventory profile, reviewing our operational model in our top markets and reducing our cost base.
“While there is more to do, I am pleased by the progress made in this period and am confident in the direction we are going.”
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