Asos suppliers cut ties amid falling profits
It comes as the group fell off the FTSE 250 index last week, only weeks after it reported a fall in half-year profits and revenue
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Suppliers to Asos have reportedly started cutting ties with the online retailer after credit insurers withdrew cover amid concerns over its declining profits, The Times has reported.
It comes as the group fell off the FTSE 250 index last week, only weeks after it reported a fall in half-year profits and revenue due to “ongoing challenges in the operating environment”.
Last month, Asos reported a loss before tax of £87.4m for the six months ended 28 February 2023.
The company also posted an 8% drop in revenues, down to £1.8bn from the £2bn reported the prior year. In addition, it faced an adjusted EBIT loss of £69.4m, down from an EBIT profit of £26.2m.
Over the last half-year period, UK sales were down 10% YoY, European sales were flat, US sales were down 7% and the rest of the world were down 12%.
Earlier this week, reports emerged that Asos reportedly faced a £1bn takeover offer from Turkish online retailer Trendyol in December of last year.
According to The Sunday Times, the offer from Trendyol, which is backed by Chinese retail giant Alibaba, valued the retailer between £10 and £12 a share.
The outlet added that Trendyol had engaged advisers from Morgan Stanley to help with the offer. It is believed there are no longer active talks between the two firms.
A spokesperson for ASOS told The Times: “Whilst trade credit insurance cover has been tightening across the retail industry, we have seen no impact on our trading ability.”
