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| Asos sees big loss as shoppers spend less on fashion | Asos sees big loss as shoppers spend less on fashion |
| (about 1 hour later) | |
| Online fashion retailer Asos has reported a big loss as its customers spend less on fashion due to the rising cost of living. | Online fashion retailer Asos has reported a big loss as its customers spend less on fashion due to the rising cost of living. |
| The firm saw a loss of nearly £32m in the 12 months to August, compared with a profit of £177m last year. | The firm saw a loss of nearly £32m in the 12 months to August, compared with a profit of £177m last year. |
| The firm expects shoppers to cut back further this year as living costs soar. | The firm expects shoppers to cut back further this year as living costs soar. |
| Inflation returned to a 40-year high in September as BBC research showed people are feeling increasingly anxious about their finances. | Inflation returned to a 40-year high in September as BBC research showed people are feeling increasingly anxious about their finances. |
| Asos, which owns Topshop and Topman, said it was facing "an incredibly challenging economic environment" at the moment. | Asos, which owns Topshop and Topman, said it was facing "an incredibly challenging economic environment" at the moment. |
| "Within the UK, Asos expects a decline in the apparel market over the next 12 months but remains confident in its ability to take share against that backdrop," it said. | "Within the UK, Asos expects a decline in the apparel market over the next 12 months but remains confident in its ability to take share against that backdrop," it said. |
| The retailer said it expected to make a further loss in the six months to the end of February, in part due to having to cut prices to clear stock. | The retailer said it expected to make a further loss in the six months to the end of February, in part due to having to cut prices to clear stock. |
| Cost of living fears grow as inflation returns to 40-year high | Cost of living fears grow as inflation returns to 40-year high |
| What is the UK inflation rate and why is the cost of living rising? | What is the UK inflation rate and why is the cost of living rising? |
| Asos and its rival Boohoo, which were seen as a poster children for the shift to online shopping, benefited during the pandemic as locked-down shoppers splashed out online. But they have struggled as people have returned to stores. | Asos and its rival Boohoo, which were seen as a poster children for the shift to online shopping, benefited during the pandemic as locked-down shoppers splashed out online. But they have struggled as people have returned to stores. |
| Asos said in June that cash-strapped consumers were also returning more items bought online, hitting its profits | Asos said in June that cash-strapped consumers were also returning more items bought online, hitting its profits |
| The fashion retailer said it now planned to rebuild its once-successful business model, sorting out problems with its supply chain and refreshing its fashion ranges. | The fashion retailer said it now planned to rebuild its once-successful business model, sorting out problems with its supply chain and refreshing its fashion ranges. |
| It also said it would focus on improving its US operations. | |
| Chief executive Jose Antonio Ramos Calamonte said: "The team and I will work resolutely to emerge from these turbulent times as a more resilient and agile business." | Chief executive Jose Antonio Ramos Calamonte said: "The team and I will work resolutely to emerge from these turbulent times as a more resilient and agile business." |
| Shares in Asos, which had slumped by 80% this year, climbed 12% on Wednesdayto regain ground lost over the past week. | |
| Samantha Mansfield, head of strategy experience and commerce at consultancy Merkle, said Asos had not gone "unscathed amid the cost of living crisis". | |
| "Even this giant retailer is no match for the financial struggles tightening the belt on the industry," she said. | |
| "People know times are tough and brands across the board are struggling with sluggish sales and significant increases in returns." | |
| Richard Hunter, head of markets at Interactive Investor, said Asos had "capped off a torrid year by swinging to a pre-tax loss as retail realities bite". | |
| He said the news last week that Asos was negotiating fresh lending deals had been "taken as a sign of financial instability". | |
| Mr Hunter added that the soaring cost of living coupled with "deflating consumer confidence" had hit its performance. |