World e-Com Blog|EN

Asos about growth plans after the departure of the CEO

British online fashion retailer Asos laid out plans to double its profitability over the long term as it seeks to restore investor confidence after the unexpected departure of its chief executive

The company's stock fell Oct. 11 when the CEO said profits could fall more than 40 percent next year because of supply chain pressures and consumers reverting to pre-pandemic behavior patterns.

Nick Beighton, who had been CEO for six years, left the company the same day, shocking shareholders.

Asos tried to regain their confidence by projecting an earnings margin (EBIT) of at least 8 percent over the long term, double its current medium-term target, by improving cost efficiency and scale as it expands.

Analysts at Jefferies said the new 8 percent target is within reach, but warned that it may not be, given the company's recent results.

"Amid disappointing market trends, market competition concerns and 4 percent margins for the foreseeable future, we doubt management will get the target results," the analysts said.

Chief Financial Officer Matthew Dunn, who now leads the company, adding to his role as chief operating officer, reports, "Our new plan will allow us to fully leverage our strong, scale and global platform to realize our ambitions."

The apparel retailer, said it is committed to "relentlessly" improving its offerings, improving the availability of partner brands, expanding its face and body products and accelerating growth outside  the domestic market.

Over the medium term, or the next three to four years, Asos has confirmed its sales target of 7 billion pounds ($9.4 billion) with EBIT (earnings before interest and taxes) margins of at least 4 percent, aided by the doubling of its business in the European Union and the United States.

read more here*