IT and warehouse problems behind Asos as fashion retailer boasts £1bn sales

Record Black Friday sales helped online fashion retailer Asos experience a 20 per cent boost in revenues over four month period covering Christmas.

Sales in all markets, except the UK, rose by around 20 per cent, with the majority of the increase coming from international retail sales, which jumped by £118.8million to £666million.  

Total group revenue over the period soared above £1billion, with UK retail sales figures experienced a £61.1billion jump to £408.9billion, while slightly lower growth of £46.6billion was registered in the EU market.

The London-based e-tailer says it had managed to ‘rebuild customer momentum,’ especially due to its best Black Friday on record. 

It did not reveal what proportion of its clothes were sold at a discount, or what sales were on the day.

‘Asos has delivered an encouraging start to the year. Strong customer acquisition activity supported by robust operational performance has driven good momentum in all our markets,’ commented CEO Nick Beighton.  

Asos’ figures show the company has improved from the start of the year, when it was hit by profit warnings and warehouse issues. These problems resulted in the company’s share price dropping by more than 50 per cent from its 2018 peak.

A big infrastructure and technology upgrade programme at Asos’ warehouses was beset with problems. Its Berlin warehouse was hit by a calamitous IT upgrade, while its site in Atlanta, Georgia suffered stock shortages. 

Despite these pitfalls, Nigel Frith, senior market analyst at asktraders.com says that Asos’ recent infrastructure upgrades are ‘starting to pay off with improvements in range and product availability helping to drive sales and improve the brand’s reputation after significant operational disruption over the past year.’

The company shipped 27.7 million orders in the four months, a 20 per cent rise on the same period in 2018. Meanwhile, 23 per cent more visits to its website were clocked up. EU retail sales rose 21 per cent to £332.5million.

The company shipped 27.7 million orders in the four months, a 20 per cent rise on the same period in 2018. Meanwhile, 23 per cent more visits to its website were clocked up. EU retail sales rose 21 per cent to £332.5million

Asos’ mixed fortunes over the last year have taken place under the chairmanship of former Royal Mail boss Adam Crozier. 

The Scotsman, who previously ran the Football Association, oversaw a profitable, but controversial turnaround at the Royal Mail Group while he was chief executive. 

In his first three years at the helm, the postal service went from an annual loss of £1.1billion to a profit of £355million.  

Thousands of post offices and jobs were lost though, the afternoon delivery was abandoned and the daily delivery was moved to later in the day.

Asos’ mixed fortunes in the last two years have taken place under the chairmanship of former Royal Mail boss Adam Crozier

Its fortunes then turned for the worse, as the firm made annual losses of £10million and £279million in 2006 and 2007. Crozier’s £1million salary received massive public criticism as he was making changes to the firm.

He later joined ITV for seven years, where he helped build the the television network’s production arm, with shows like Victoria and Poldark, and reduced its traditional reliance on advertising. I

TV’s share price quadrupled during his times as chief executive by the time he stepped down.He joined Asos as chairman in November 2018. 

Asos’ headquarters are situated in the former Carreras Cigarette Factory in Camden. The Art Deco building is noted for its distinctive Egyptian Revival architecture and has two giant black cat statues at the front of the building.

Shares in Asos rose by 4.5 per cent in early trading to 3,160p.