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A tumble in Asos’s share price wiped more than £380million from its market capitalisation, leaving the online retailer worth £777.5million.<\/p>\n
The clothing brand said that due to higher returns rates, as well as the impact of the cost-of-living crisis on shoppers’ desire to spend, it expects its full-year profits for the 12 months to the end of August will now be between £20million and £60million.<\/p>\n
That is far below the £110million to £140million that it forecast in January and the £193.6million it made last year.<\/p>\n
Chief operating officer Mat Dunn said: “What is now clear, based on the significant increase in returns rates that we have seen, is that this inflationary pressure is increasingly impacting our customers’ shopping behaviour.<\/p>\n
“It is too early to tell for how long the current pattern of behaviour will continue, but we are taking swift and decisive steps to minimise the impacts.”<\/p>\n
The company, which has named commercial officer Jose Antonio Ramos Calamonte as its new chief executive, reported that its third quarter sales were down by £4.5million to £983.4million.<\/p>\n
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Asos’s red alert about waning consumer confidence was echoed by N Brown, owner of JD Williams, Simply Be, Jacamo and other firms.<\/p>\n
N Brown’s first-quarter revenues were down 2.1 percent to £165.1million, while Boohoo said that its sales had fallen 8.3 percent to £445.7million – an effect of the end of lockdown restrictions, it claimed.<\/p>\n
Chole Collins, head of apparel at analyst GlobalData, said that the increasingly tough economic environment means that Mr Calamonte now faces a “huge challenge”.<\/p>\n
She added: “With Boohoo also releasing a sombre set of results for the same period and Missguided recently falling into administration, fast fashion seems to be losing its shine.<\/p>\n
“Financial uncertainty means keeping up with the latest trends is no longer a priority for many shoppers.”<\/p>\n