Asos boss says retailer ‘resilient' as US tariffs loom
Asos has cheered early signs that its overhaul is paying off while US tariffs loom and the retailer braces for new charges on cheaper imports.
The online fashion retailer said the first half of its financial year was the 'strongest sign yet' that its turnaround of the business was working.
Its boss stressed that the firm was taking a 'flexible approach' to fast-evolving global trade policy.
In particular, the company is set to be affected by US President Donald Trump's plans to scrap the 'de minimis' rule which means lower-cost goods shipped directly to US consumers are exempt from being charged customs duty.
Plans to axe this rule, which is set to take effect from May, means orders below 800 dollars (£602) will face new charges.
Asos's finance chief Dave Murray said it does not tend to have orders that are over that cap so 'it hasn't really come into effect yet', adding that the company's 'focus is making sure we have flexibility in our operations to continue providing our US consumers' with its products.
Asos recently closed its US warehouse in Georgia, and instead handles orders from American consumers from its warehouse in Barnsley, South Yorkshire, as well as a smaller local site in the US.
Jose Antonio Ramos Calamonte, Asos's chief executive, said that since this change, 'test and react' products had surged by 50% in the US, because they are available faster.
The test and react model, which is prominent for fast-fashion retailers like Shein, sees small batches of new-trend products brought to market more quickly.
Mr Ramos Calamonte said that regulation was changing 'daily' with many details still unclear, meaning that the business was focusing on being 'flexible and agile' as well as its approach.
He also said the firm was 'not that deep into China' with about 5% of US sales of its own-brand products generated in China.
The escalating trade war between China and the US has seen Mr Trump confirm a 145% tariff on Chinese imports, while China reciprocated with a 125% levy on US imports.
'We have a very widespread supply chain… we are pretty resilient because we have a lot of different sources,' Mr Calamonte said, citing producers in northern Africa, Turkey, continental Europe, and the UK.
Meanwhile, Asos reported revenues of £1.3 billion for the six months to March 2, declining 14% compared with the same period last year.
It also warned that revenues were expected to come in at the 'bottom end' of its guidance range for the full year, which means sales could drop by as much as 9%.
The decline has been driven by the platform clearing a build-up of stock and slashing the number of discounted items, focusing instead on selling products and new ranges at full price.
Asos's own-brand products, sold at full-price, returned to growth during the period, while sales of its Asos Design range jumped by nearly a tenth in the UK.
'Our own-brand is doing better than our brand partners,' Mr Ramos Calamonte said.
'That is not a surprise, to be honest. We knew that, from the very beginning, in our new commercial model our own brands were going a little bit faster than our brand partners.'
However, he said some ranges were 'selling really fast' such as collaborations with Adidas and New Balance, while Asos plans to add new brands to the platform like Good American and Pharrell Williams' Ice Cream label.
The group narrowed its pre-tax losses to £241.5 million for the half-year, from £246.8 million a year ago.
On an adjusted basis, earnings before interest, taxes, depreciation and amortisation (EBITDA) swung to a £42.5 million profit, from a £16.3 million loss the prior year.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Reuters
20 minutes ago
- Reuters
French minister calls for extension of EU-US trade talks
PARIS, June 29 (Reuters) - France's finance minister has called for extending EU-U.S. trade talks beyond the July 9 deadline in order to secure a better agreement. U.S. President Donald Trump has set the deadline for the trade talks, warning that failure to reach agreement could trigger higher U.S. tariffs on goods from cars to pharmaceuticals. Progress in the negotiations between the huge trading partners remains unclear. European officials are increasingly resigned to a 10% "reciprocal" tariff imposed by Washington in April being the baseline in any deal, sources familiar with the talks have told Reuters. "I think that we are going to strike a deal with the Americans," French Finance Minister Eric Lombard told newspaper La Tribune Dimanche in an interview published on Sunday. "Regarding the deadline, my wish is for another postponement. I would rather have a good deal than a bad deal on July 9," he said. U.S. Treasury Secretary Scott Bessent said earlier this month that deadlines on some countries negotiating in good faith could be extended. French President Emmanuel Macron said following an EU summit on Thursday that France wants a quick and pragmatic trade deal with the United States but would not accept unbalanced terms. EU leaders discussed a new U.S. proposal at the summit but the European Commission did not reveal the content of the offer. Lombard said that energy could form part of a trade deal, with the EU potentially increasing its imports of U.S. gas to replace flows from Russia.
The Independent
an hour ago
- The Independent
Pride organisers warn Trump's DEI purge directly hitting UK events as corporate sponsorships drop
UK Pride faces a 'critical' funding crisis amid warnings that Donald Trump 's assault on diversity, equity, and inclusion (DEI) in the US is having a direct impact on firms in Britain. The UK Pride Organisers Network said 75 per cent of Pride events across the UK seen a decline in corporate sponsorships this year, with a quarter experiencing funding drops of more than 50 per cent. Meanwhile, GoFundMe has reported a 'remarkable' 82 per cent increase in organisers resorting to crowdfunding events to bridge the gap in funding. Pride organisers have told The Independent that big corporations who have long sponsored them are 'pulling back their funding in all aspects', especially those with head offices in the US, after Trump issued a series of executive orders targeting diversity programmes in the public and private sectors, with many corporations such as Amazon and Google scaling back their DEI efforts since February. While Pride has grown as a movement across the UK for a decade, Dee Llewellyn, chair of UK Pride Organisers Network and director of partnerships and growth for London Pride, said corporate funding has 'fallen off a cliff', causing a number of events across the country close their doors, including big events such as Liverpool. The situation has led one expert to warn that 'the golden era of corporate sponsorship might be over' for LGBTQ organisers. Mrs Llewellyn fears the LGBTQ community could experience 'five years of difficulty and struggles' as Trump fully implements the DEI cuts, adding 'it is the start of that process now.' 'I think we will see more global brands declining, not because they don't want to participate, but because they don't have the EDI budget to do so,' she added. 'It's not the people on the ground in the UK either, I've had brands that have withdrawn this year that were absolutely devastated to have to do it. 'But they've had their budgets cut from America and there was absolutely nothing they could do to argue or fight that in the UK.' Pride events across the country receive a bulk of funding from big businesses, varying on a scale of a minimum of 50 per cent funding to events like London, where approximately 95 per cent of the funding comes from corporate partnerships. Gary Richardson, an organiser from Worthing Pride whose regional celebrations were almost cancelled this year, said: 'It very much seems if they've got offices overseas, specifically in America, the DEI conversations that are happening there seem to be drip feeding into the economy over here'. John Hyland, former co-chair of Liverpool Pride and the Community Partnerships and Individual Giving Lead for LGBTQ charity Sahir, close supporters of Pride celebrations in the city, echoed Mr Richardson's point: 'When America sneezes, we all catch a cold.' 'Businesses seem to be a bit more reluctant to support LGBT organisations, which is having a massive impact on the likes of Pride,' he added. Pride in Liverpool had to cancel its plans this year due to 'significant financial and organisational challenges, which have impacted timescales and resulted in it reverting to an almost entirely volunteer-led operation.' Organisers severed ties with key sponsor Barclays in May after the bank's boss said it would prohibit Trans women from using female toilets in its buildings following the Supreme Court Ruling which ruled that the terms 'woman' and 'sex' in the 2010 Equality Act 'refer to a biological woman and biological sex'. 'I think definitely in light of what's happened with the Supreme Court ruling, we've had a number of number of transgender community-led protests happen in Liverpool,' said Mr Hyland. 'If there's a year where we need Pride to happen, it's this year and our community has been very vocal about that.' As well as a decrease in corporate sponsorships, organisers have cited that local communities have struggled to fill the financial hole in Pride events planning due to the cost of living. Mr Hyland said that calls for support from local businesses in Liverpool fell through because 'they haven't got that kind of money.' On an average year where it costs around £140,000 to produce Worthing Pride over a weekend, 60 per cent of budgeting comes from sponsorship, while the rest comes from ticket sales. This year, the organisers are aiming for 70 per cent from ticket sales and 30 per cent from sponsors. Instead of receiving support from five to six big sponsors, they've managed to accrue 20 small sponsorships instead, with a number of companies offering pro bono support. Dr Francesca Ammaturo, senior lecturer in in Sociology and International Relations at London Metropolitan University, author of forthcoming book The Politics of Pride Events: Global and Local Challenges, said that while big businesses have taken on Pride as an issue of corporate responsibility, organisers have relied on corporate sponsorship because public funding has not always been accessible to the LGBTQ+ community. 'Pride events have become really dependent on them,' she said. 'Now when you insert the rollback that Trump is enacting on DEI policies, that is sending shockwaves not just across the US, but also across the globe because of globalisation. She added: 'The repercussions for these companies to sponsor pride events even beyond the US could be creating some backlashes at home. 'It's quite difficult for LGBT organisers today to accept that the golden era of corporate sponsorship might be over, at least for now until we realise what is the next political that we will encounter.' Dr Ammaturo added that big business involvement in Pride had always been 'a very superficial commitment' more akin to 'a marriage of convenience which was conducive to a certain veneer of rainbow washing'. Mrs Llewellyn said that despite the radical funding cuts, Pride will persist in the UK, adding: 'It's essential now more than ever, really more than it has been over the past 10 years for us to be able to stand together as a community to have that safe space for us to join together. 'Pride is a protest. That is what it was born and rooted in,' she added. 'We've been through lots of hardships as a community, but when we stand together and we unite our voices, that is when we're strongest.'
The Independent
3 hours ago
- The Independent
Starmer asked to intervene in Trump-Canada dispute
Donald Trump has abruptly ended trade discussions with Canada and threatened new tariffs, citing Canada's planned digital services tax. The US president stated the tax is a direct and blatant attack on US tech companies, leading him to terminate all trade talks immediately. Prime Minister Sir Keir Starmer is facing calls to intervene in the dispute, particularly ahead of Mr Trump's state visit to the UK in September. Opposition parties, including Liberal Democrats and SNP, have criticised Mr Trump's trade war tactics and questioned the UK government's approach. The escalating tensions have caused market turmoil and highlight concerns about the reliability of the US as a trade partner.
