Asos reports 25% drop in sales amid Covid-19 crisis

Online retailer Asos has reported a 25% decrease in group sales over past three weeks as the UK battles the Covid-19 pandemic, despite a 21% increase in revenues to £1.6bn in its half-year results.

In the six months to 29 February 2020, Asos also reported a 21% increase in retail sales to £1.5bn, compared with £1.2bn in 2019, with the UK attributing £577m and international sales profiting £974m.

Gross profit also increased by 17% to £750m compared with £640m in 2019.

Asos said demand has been “significantly impacted” since containment measures were introduced amid the coronavirus pandemic. The retailer also said disruptions to product sourcing from China is minimal, and is “closely monitoring” European sourcing.

Due to the pandemic, Asos added its priority is the health and wellbeing of its people and customers as all warehouses have remained operational, but at lower capacity with “effective social distancing measures in place”.

Nick Beighton, CEO, said: “Asos had a strong start to the year, making significant progress against the priorities we set out and delivering a better than anticipated first-half performance, driven by the operational improvements we are making to the business. 

“Along with other businesses, we have been significantly impacted by the Covid-19 outbreak. Our first priority was to quickly put in place the necessary measures to ensure the health and wellbeing of our people. I have been extremely impressed with the pace of change and the flexibility our teams have shown in adopting these new ways of working. I’d like to thank them all for the way they have responded. “

He added: “Since then, we have been focused on keeping our business delivering for customers whilst implementing a series of actions to mitigate the sales impact we have been experiencing. At the same time we have been working to strengthen our financial position, including reaching agreement with our lenders to provide us with additional short-term financial flexibility. 

“The Covid crisis is clearly going to continue to be tough for everyone and the short-term outlook remains highly uncertain, but the measures we have taken ensure we are able to be clearly focussed on making sure that ASOS emerges as a stronger and better business.”