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ASOS CEO resigns as company issues profits warning

Oct 13, 2021 United Kingdom
ASOS CEO resigns as company issues profits warning
The fashion retailer announced the CEO’s resignation as it disclosed the final results for the fiscal year of 2021. Despite a strong performance, the company issued a profit warning due to supply chain disruptions and rising costs

Board changes

Nick Beighton, who has worked at ASOS for 12 years, including six as CEO, has stepped down, being replaced by Mat Dunn, current Chief Financial Officer. Dunn will take on both positions, as the search for a successor for Beighton is underway. Katy Mecklenburgh, currently Director of Group Finance, will become Interim Chief Financial Officer. In addition, Ian Dyson will become Chair, replacing Adam Crozier, whose decision to step down has been previously announced. Jørgen Lindemann is also joining the board as a Non-Executive Director, bringing the experience of leading digital-first businesses (at-present, Lindemann is Chair of Miinto, the Danish-based online fashion marketplace). According to Adam Crozier, these changes are driven by the necessity to accelerate international growth, building on ASOS's strength in the UK.

Final results for the fiscal year of 2021

"ASOS has delivered another strong performance, with continued growth in customer numbers driving further increases in sales and profits. Our success has been underpinned by our focus on delighting fashion-loving 20-something customers with greater choice, service, and engagement. We have also continued to invest in our platform and offer, including the successful acquisition and integration of the Topshop brands. This performance is based on the hard work and determination of all ASOS-ers and I want to thank them for everything they have done”, commented Mat Dunn, Chief Operating Officer and CFO.

By the 31st of August 2021, adjusted pre-tax profit rose by 36% to 193.6 million British pounds (228 million euros), as compared to 2020. The fashion retailer reported sales growth across all regions, on a comparable basis to last year. Sales increased by 36% in the UK, by 21% in the US, by 15% in the EU and by 6% in the rest of the world. Gross margin decreased by 200 basis points to 45.4% due to elevated freight & Brexit-related duty costs, product mix, foreign currency fluctuations and increased customer investment. ASOS customer base grew by 13% to 26.4 million.

However, the group is expecting a fall in adjusted pre-tax profit between 110 million British pounds (129.6 million euros) to 140 million British pounds (165 million euros) for the fiscal year of 2022. This forecast accounts for factors such as normalized return rates (removal of 67.3 million British pounds (79 million euros) of COVID-19 related benefit) and cost headwinds that include incremental inbound freight costs, Brexit duty annualization, outbound delivery costs and labour cost inflation. Mat Dunn explained that ASOS’s performance in the next 12 months is likely to be constrained by demand volatility and pressure on the supply chain.

Image credits: Asos

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