{"id":5529,"date":"2018-12-17T08:15:02","date_gmt":"2018-12-17T08:15:02","guid":{"rendered":"http:\/\/www.styledeals.co.uk\/blog\/asos-issues-profit-warning-over-fashion-discounting\/"},"modified":"2018-12-17T08:15:02","modified_gmt":"2018-12-17T08:15:02","slug":"asos-issues-profit-warning-over-fashion-discounting","status":"publish","type":"post","link":"https:\/\/www.styledeals.co.uk\/blog\/asos-issues-profit-warning-over-fashion-discounting\/","title":{"rendered":"Asos issues profit warning over fashion discounting"},"content":{"rendered":"\n<div property=\"articleBody\">\n<figure class=\"media-landscape no-caption full-width lead\"><span class=\"image-and-copyright-container\"><\/p>\n<p>                <img loading=\"lazy\" decoding=\"async\" class=\"js-image-replace\" alt=\"A woman and man modelling Asos clothing\" src=\"https:\/\/ichef.bbci.co.uk\/news\/320\/cpsprodpb\/B658\/production\/_102108664_resized_asos_march2018_day1_shot10_0045copy.jpg\" width=\"976\" height=\"549\"\/><span class=\"off-screen\">Image copyright<\/span><br \/>\n                 <span class=\"story-image-copyright\">Asos<\/span><\/p>\n<p>            <\/span><\/p>\n<\/figure>\n<p class=\"story-body__introduction\">Online fashion retailer Asos has warned of lower profits this financial year after &#8220;unprecedented&#8221; discounting hit its trading in November.<\/p>\n<p>Despite sales growth of 14% from September to November, it had seen &#8220;a significant deterioration&#8221; in November.<\/p>\n<p>Economic uncertainty plus weaker consumer confidence had led to &#8220;the weakest growth in online clothing sales in recent years&#8221;.<\/p>\n<p>&#8220;As a result, we have reduced our expectations,&#8221; <a href=\"https:\/\/www.asosplc.com\/~\/media\/Files\/A\/Asos-V2\/reports-and-presentations\/asos-trading-update-dec18-final.pdf\" class=\"story-body__link-external\">the firm said.<\/a><\/p>\n<p>Asos shares fell 35% in early trading.<\/p>\n<p>Chief executive Nick Beighton said the fashion industry was currently experiencing an &#8220;unprecedented level of discounting, something I&#8217;ve not seen before&#8221;.<\/p>\n<p>In a conference call with industry analysts, he said consumer confidence was &#8220;fragile&#8221;.<\/p>\n<ul class=\"story-body__unordered-list\">\n<li class=\"story-body__list-item\"><a href=\"https:\/\/www.bbc.co.uk\/news\/business-46555804\" class=\"story-body__link\">Why are people spending less this Christmas?<\/a><\/li>\n<li class=\"story-body__list-item\"><a href=\"https:\/\/www.bbc.co.uk\/news\/business-46540142\" class=\"story-body__link\">Why are there so many pre-Christmas sales?<\/a><\/li>\n<\/ul>\n<p>Asos had previously forecast sales growth of 20-25% in the year to August 2019. However, it now expects just 15% growth.<\/p>\n<p>Its anticipated earnings margin was also revised down, from 4% to 2%.<\/p>\n<h2 class=\"story-body__crosshead\">Bleak trading<\/h2>\n<p>&#8220;Whilst trading in September and October was broadly in line with our expectations, November, a very material month for us from both a sales and cash margin perspective, was significantly behind expectations,&#8221; Asos said.<\/p>\n<p>&#8220;There has been a high level of discounting and promotional activity across the market. We have increased our own level of promotional activity, leading to a higher discount and continued high clearance mix.<\/p>\n<p>&#8220;This increased discounting, coupled with the unseasonably warm weather during the last three months has reduced our ASP [average selling price], which has not been compensated by higher units per basket.&#8221;<\/p>\n<p>Outside the UK, Asos said trading conditions in Germany and France, which account for about 60% of its EU sales, had become &#8220;significantly more challenging&#8221;.<\/p>\n<p>Over the three months to 30 November, total group revenue was \u00a3656m, up from \u00a3576.7m in the same period last year.<\/p>\n<p>Asos&#8217;s bleak assessment comes after Sports Direct boss Mike Ashley described trading in November as &#8220;the worst on record, unbelievably bad&#8221;.<\/p>\n<p>&#8220;Retailers just cannot take that kind of November,&#8221; Mr Ashley told analysts last week. &#8220;It will literally smash them to pieces.&#8221;<\/p>\n<\/p><\/div>\n<p><br \/>\n<br \/><a href=\"https:\/\/www.bbc.co.uk\/news\/business-46590130\">Source<\/a> by <a href=\"\">[author_name]<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Image copyright Asos Online fashion retailer Asos has warned of lower profits this financial year after &#8220;unprecedented&#8221; discounting hit its trading in November. Despite sales growth of 14% from September to November, it had seen &#8220;a significant deterioration&#8221; in November. Economic uncertainty plus weaker consumer confidence had led to &#8220;the weakest growth in online clothing &hellip; <\/p>\n","protected":false},"author":0,"featured_media":5530,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-5529","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general"],"_links":{"self":[{"href":"https:\/\/www.styledeals.co.uk\/blog\/wp-json\/wp\/v2\/posts\/5529","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.styledeals.co.uk\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.styledeals.co.uk\/blog\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/www.styledeals.co.uk\/blog\/wp-json\/wp\/v2\/comments?post=5529"}],"version-history":[{"count":0,"href":"https:\/\/www.styledeals.co.uk\/blog\/wp-json\/wp\/v2\/posts\/5529\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.styledeals.co.uk\/blog\/wp-json\/wp\/v2\/media\/5530"}],"wp:attachment":[{"href":"https:\/\/www.styledeals.co.uk\/blog\/wp-json\/wp\/v2\/media?parent=5529"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.styledeals.co.uk\/blog\/wp-json\/wp\/v2\/categories?post=5529"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.styledeals.co.uk\/blog\/wp-json\/wp\/v2\/tags?post=5529"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}