ASOS is set to axe 280 of its concession brands following ‘disappointing’ sales figures.
The online fashion retailer has seen half-year profits tumble blamed on expansion costs and heavy discounting for hitting its performance.
The company saw pre-tax profits crash 87 per cent to £4 million, which it blamed on “temporary transition costs” linked to its warehouses in Europe and Atlanta.
In a bid to drive up profits for the remainder of the year Asos said it’s “secured a mix of smaller, fresher up-and-coming brands” to win back shoppers in a shake-up of its current network” the Mirror reports.
This will see them axe 280 brands, and adding a total of 190 new ones in a huge shake up to the company.
“Some more established premium brands don’t currently appeal to our 20-something customers and we have exited these, onboarding others that resonate better,” a statement said.
New brands include Tommy Hilfiger, Aveda, Estee Lauder and Kilian online.
The company is also planning to introduce & Other Stories online this summer, along with Opening Ceremony and Margiela MM6.
It is not clear which companies have faced an exit. Fabulous Digital has contacted ASOS for a comment.
In the US, ASOS was hit by staffing issues, resulting in a backlog of orders, while in Europe the group is automating its warehouse in Berlin.
Sales grew 14 per cent, or 12 per cent at constant currency, to £1.3 billion in the six months to February 28. UK sales rose by 16 per cent and international sales by 12 per cent.
But the firm bemoaned a “disappointing” set of figures, pointing to costs relating to adding new warehouse capacity and a high level of discounting and promotional activity across the market.
Boss Nick Beighton said: “We have identified a number of things we can do better and are taking action accordingly. We are confident of an improved performance in the second half and are not changing our guidance for the year.
“We are nearing the end of a major capex (capital expenditure) programme.
“Whilst this has inevitably involved significant disruption and transition costs, the global capability it now provides us gives us increased confidence in our ability to continue to capture market share whilst restoring profitability and accelerating free cash flow generation.”
In December, the company warned that profits were likely to be lower than expected due to a significant deterioration in trading during the lead-up to Christmas.
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The announcement indicated that the company was not immune from the cyclical slowdown, caused in part by the disruptive effect of Black Friday on the usual retail calendar.
Shares were up nearly three per cent in morning trade at 3,230p.
And the company has released a £45 tea dress that looks nearly identical to this £315 Rixo fave.
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