Online fashion retailer Asos has reported a 68% decrease in profits before tax to £33.1m, during the year to 31 August 2019.
The retailer said the decrease was the result of transition costs of £45m during the period, up £20m on the prior year reflecting a “substantial” amount of one-off costs in support of its warehouse transitions.
It also incurred £5.5m of restructuring costs reflecting the changes it started to make to its organisation in support of our approach to removing non-strategic cost.
Despite the slump in profits, Asos reported a 13% increase in retail sales £2.6bn during the year to 31 August 2019. The sales growth was attributed to increased demand from existing customers, reflected in “strong order growth” of 20% during the period.
Its UK retail sales also grew by 15% in the year, despite an “increasingly competitive market”.
CEO Nick Beighton said: “This financial year was a pivotal period for ASOS, where we have invested significantly and enhanced our global platform capability to drive our future growth. Regrettably this was more disruptive than we originally anticipated.
“However, having identified the root causes of our operational issues, we have made substantial progress over the last few months in resolving them. Whilst there remains lots of work to be done to get the business back on track, we are now in a more positive position to start the new financial year.”
He added: “Our focus now shifts to ensuring that we enhance our capability to drive an improved customer experience and leverage the benefits from the investments we have made.”