This week, we will remember Atos in France… and Asos in the United Kingdom. Like the computer group, the British specialist in the sale of clothing and accessories online will certainly be among the biggest underperformance of this weekly review. On Thursday, Asos lost almost a third of its value, falling back to its lowest levels since 2010. It is now plunging 85% from its last peak of 60 pounds in March 2021.
The online fashion company has lowered its full-year forecast after notably seeing a significant increase in product returns, both in the UK and mainland Europe, as a surge in inflation prompts consumers to exercise more restraint. Asos now only expects sales growth of 4% to 7% over the whole of 2022, well below the range of 10% to 15% advanced in January. As for pre-tax profit, it will be just £20-60m, down from £110-140m previously.
Sustainable behavior change?
It is now up to the new management to try to straighten the bar. Jose Antonio Ramos Calamonte, Commercial Director since January 2021, has been appointed as General Manager, replacing Nick Beighton, who resigned last October. Jose Calamonte has a strong experience in the field of commerce, in which he has been evolving for 18 years. He thus led the commercial strategy of Inditex, parent company of Zara, and of the Spanish branch of Carrefour, before taking the helm of the Portuguese fashion group Salsa Jeans. Jørgen Lindemann, former independent director at Zalando, becomes CEO, replacing Ian Dyson, who had been on the board since 2013. He too had planned to leave the company, but only when a new boss would have been found. Jørgen Lindemann joined Asos in November last year.
Therefore, it is the director of operations, Mat Dunn, who spoke on the sidelines of the day’s announcements. He explained ” during our half-year results, we presented the actions we had taken in a more difficult environment, in particular in the face of the challenges of the global supply chain, which helped to improve the profile of stocks and our new products, with increased availability. This translated into accelerated growth, but we were not yet feeling the impact of inflationary pressures on our customers (…) Which is now very clear (…) and it is too early to say how long this Behavioral change in purchasing will continue “.
First drop in sales at Boohoo
Another victim of the day, another online fashion clothing seller, Boohoo Group, fell more than 13%. He also communicated this Thursday on his market plan and sales have, for the first time in the history of the company, declined over a quarter. Customers are now returning to the store, after having consumed very heavily via e-commerce during the Covid pandemic period. Over the three months to May 31, which correspond to the company’s first fiscal quarter, they fell by 1% on the domestic market and by 8% in all areas of establishment combined.
The group had warned last month that its sales could peak in the first half of the year due to the release of containments in Europe, increased price competition in the United States, which represents more than 20% of the company’s outlets and supply chain constraints. Since the beginning of the year, Boohoo Group has lost more than half of its value. The two titles lead in particular in their fall to the German Zalando, which lost almost 10% on the Frankfurt Stock Exchange.