Asos agrees to £650m banking facility as it prepares stock write off
Asos said it is preparing to implement a 100 million pound stock write-off in 2023, under a new commercial model that aims to increase flexibility within its logistics operations and reduce costs.
The announcement comes as part of the online retailer’s newly published financial report for the year to August 31, 2022, in which the company also confirmed it had agreed to a 650 million pound banking facility.
The move hopes to provide additional “financial flexibility” as it looks to rearrange its operations and improve its inventory management.
Asos reported a slim one per cent rise in revenue, taking it to 3.94 billion pounds in the year to August 21.
It added that its sales rose in the UK by seven percent, 10 per cent in the US and two percent in Europe, however figures slipped by nine per cent in other markets.
Much of its growth was attributed to Topshop brands, which Asos said had contributed to both revenue growth and gross margin expansion across all key territories.
The retailer added that Topshop had posted strong sales growth of 105 per cent Year-on-Year in FY2022, and a further growth of over 200 per cent in the US, supported by its wholesale partnership with Nordstrom.
Operational improvements over four key areas.
The brand’s newly appointed CEO José Antonio Ramos Calamonte said: “In this tough economic environment, ASOS will continue to build on its core strengths – the Asos brand, the carefully curated range of Partner Brands on offer, its strong fashion credibility and market leading position in the UK.”
Over the next 12 months, Calamonte noted the company would be focusing on delivering key operational improvements over four key areas.
This includes a renewed commercial model, through which it is aiming to implement a shorter buying cycle and a differentiated approach to stock clearance.
Additionally, it is striving for stronger order economics, a flexible balance sheet and a reinforced leadership team with a “refreshed culture”.
Calamonte further commented that Asos management was looking into creating a business capable of generating long-term sustainable growth, with a comprehensive review underway of its capital allocation.
