logo
Asos Confident on Growth Amid Tariff Uncertainty

Asos Confident on Growth Amid Tariff Uncertainty

British online fashion retailer Asos is well-placed to cope with the fallout from US tariffs, it said on Thursday, and while it was too early to call, its flexible model and lower exposure to sourcing from China could help drive growth.
Asos posted higher half-year earnings on Thursday, showing that a plan to rebuild the retailer's fast fashion credentials with its 20-something customer base was starting to work, though it now faces new upheavals from tariffs and trade turmoil.
Britain is Asos's biggest market, but the United States accounts for about 10 percent of total sales.
Asked about the impact of tariffs, CEO José Antonio Ramos Calamonte said there were a lot of moving parts with changes almost daily, and details remained unclear.
ADVERTISEMENT
'The answer always has to be flexibility and adaptability,' he told reporters, adding that Asos was better placed than its competitors as less than 5 percent of its own-brand sales in the US come from products made in China, which faces the highest US tariffs.
Ramos Calamonte said Asos's source markets are spread across Morocco, Turkey, Eastern Europe and Britain, adding that in total about 25 percent of its own-brand garments come from China.
In recent years, Asos has faced intensifying competition from Chinese-founded giant Shein and China's Temu in both its home market and the United States.
However, President Donald Trump's high tariffs on Chinese goods imported into the United States and shifts in customs policy on direct shipments to consumers in Britain and the US could now give Asos an advantage.
Britain said on Wednesday it would review the customs treatment of low-value imports exempting goods worth 135 pounds ($180) or less from duties, a system that has benefited Chinese retailers.
The US administration has gone further, banning from May the waiver of customs duties on imported items worth less than $800 that are shipped to individuals from China and Hong Kong.Though Asos ships products for US sales from Britain in individual packages after the company mothballed its US warehouse earlier this year, it will still face lower import levies than its Chinese competitors.
Shares in Asos were flat in mid-morning deals.
For the 26 weeks to March 2, Asos posted half-year adjusted earnings (EBITDA) of £42.5 million, beating forecasts. It said it was on track for annual earnings to come in at between 130 million pounds to £150 million.
ADVERTISEMENT
Learn more:
Asos Cedes Topshop to Denmark's Bestseller for $178 Million
Asos is forming a joint venture with the family's Heartland A/S, which will pay £135 million ($178 million) for a 75 percent stake in the two brands the UK company acquired in 2021 from Philip Green's insolvent retail business as part of a £295 million deal.
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

Shiploads of cars ready to set sail for US from UK as trade deal kicks in
Shiploads of cars ready to set sail for US from UK as trade deal kicks in

Yahoo

time13 minutes ago

  • Yahoo

Shiploads of cars ready to set sail for US from UK as trade deal kicks in

Shiploads of Minis, Aston Martins and Range Rovers will set sail for the US on Monday as the UK-US trade deal kicks in, but British farmers say they have been used as collateral to save the car industry. Auto shipments across the Atlantic were down more than half in May after Donald Trump's imposition of a 25% tariff on 3 April on top of an existing 2.5% levy. However, as of one minute past midnight US time on Monday – 5am in the UK – that has been reduced to 10% for cars, and UK manufacturers expect pent-up demand to be unleashed. Aston Martin's chief executive, Adrian Hallmark, said the luxury carmaker had stopped shipping between April and June, something he said had been 'not catastrophic, but slightly uncomfortable'. The outline of the trade deal was agreed between Trump and Keir Starmer in early May, the first such bilateral pact to mitigate the president's import taxes. However, delays in agreeing the fine print meant the higher tariff had continued to apply, pushing the cost of British cars up by more than a quarter for US importers. Hallmark told a British car industry conference last week that he was 'planning to invoice three months' worth of sales in a 24-hour period', with stocks in the US down by 50% due to the pause. Aston Martin exports 90% of its cars, but its customers are wealthy and were willing to wait. 'The demand has been strong and will be in good shape when we start to invoice cars like fury on Monday next week,' he said. On the eve of the trade deal coming into force, the business secretary, Jonathan Reynolds, received reassurances from the sportscar maker Lotus that it had no plans to close its UK factory, in Hethel, Norfolk. Reynolds contacted Lotus bosses after it emerged that the carmaker was considering shifting production to the US – a move that would jeopardise 1,300 jobs. A Department for Business and Trade spokesperson said Reynolds met Lotus and its owner, Geely, on Sunday to clarify the company's situation, and 'was reassured by management that they are committed to their UK operations and have no plans to close their Hethel plant'. A decision to relocate manufacturing abroad by a prestige brand such as Lotus would be embarrassing for the UK government. Labour's industrial strategy, published last week, singled out automotive production as among the strategic sectors it wants to support. The car industry welcomed the US-UK trade deal when it was struck, with it preventing job losses at JLR, the maker of the Jaguar and Land Rover brands. Range Rovers are particularly popular in the US. However, the lower 10% duty only applies to a quota of 100,000 cars a year – slightly below last year's export numbers – leaving little room for growth. JLR alone exported 84,000 cars in the year up to April 2025. The initial trade deal also included a promise of zero tariffs on steel but this has been held up by negotiations over the origin of some raw materials for smelting, particularly at Tata's plant at Port Talbot in south Wales. Concessions were won with new tariff-free quotas for British and US beef in each other's markets, as well the controversial removal of a 19% tariff on American ethanol imports, which the UK industry says leaves biofuel plants facing closure. The president of the National Farmers' Union, Tom Bradshaw, said the government must stop using agriculture as a bargaining chip in talks and urged Starmer to take the sector off the table in the talks on steel and remove the 10% baseline tariff Trump has applied to all imports. 'Agriculture has borne the responsibility of removing tariffs for other sectors. At some point they've got to stop relying on agriculture to take the burden,' Bradshaw said. 'Agriculture has nothing left to give.' On the upside for farmers, they can now sell 13,000 tonnes of British beef to the US, but again there is a catch. They will not be able to sell until January next year because beef is part of a wider tariff deal with other countries, and this year's quota has already been filled by Brazilians who stockpile beef in storage near the Mexican border. The UK steel industry has at least won a temporary exemption from the 50% tariff imposed by Trump at the start of this month until 9 July, but it still faces a 25% tariff on exports. It is waiting anxiously for delivery of the promised zero rate tariff. 'Time is running out to secure a UK-US steel deal and remove damaging tariffs,' said Gareth Stace, the director general of UK Steel. 'Every day of delay costs our steelmakers dearly. Contracts are being lost, investment decisions remain on hold, and uncertainty is paralysing business decisions. We urgently need a swift, positive resolution to these talks to protect jobs, unlock growth, and restore confidence in the sector.' Yet even in a zero-tariff deal, Port Talbot may still face issues. The UK operations of the Indian conglomerate are relying on imports of steel melted and poured in its sister plants in India and the Netherlands while they move from a polluting blast furnace to the greener electric arc furnace to smelt steel. However, UK Steel is hoping there can be an exception to the tariffs agreed for the Welsh operation along with the five other plants in the UK. UK trade officials are understood to be optimistic they can secure such an exemption. Sign in to access your portfolio

UK electric car sales up by a third in first half of 2025, preliminary data suggests
UK electric car sales up by a third in first half of 2025, preliminary data suggests

Yahoo

time13 minutes ago

  • Yahoo

UK electric car sales up by a third in first half of 2025, preliminary data suggests

British electric car sales rose by a third in the first half of 2025 after the strongest June for overall car sales since before the Covid pandemic. The number of battery electric car sales rose 34.6% to 224,838 units in the first six months of the year, according to preliminary data from the Society of Motor Manufacturers and Traders (SMMT), a lobby group. New car sales rose 6.8% year-on-year in June to 191,200 units, the best sales figures for the month since 2019. A quarter of all June sales, or nearly 47,400, were electric. Separate sales figures published by the thinktank New AutoMotive, suggested electric sales were buoyed in June compared with May by the launch of the new version of the Model Y from Tesla, which has remained the biggest electric car seller in the UK despite the controversy around the support for far-right politicians of its founder, Elon Musk. Ford achieved the fastest growth in UK electric car sales, New AutoMotive said. The UK car industry has struggled to increase sales to pre-pandemic levels as potential buyers have been hit by the cost of living crisis after Russia's full-scale invasion of Ukraine. British car factories have also had to contend with a major slowdown in response to extra US tariffs of 25% announced by Donald Trump in March. UK car production last month fell to its lowest level for May since 1949 as manufacturers cut back shipments. Those factories received respite on Monday when a lower tariff rate of 10% kicked in after a limited trade deal was agreed between the UK and US. The 10% rate will apply to the first 100,000 vehicles exported to the US. Despite these difficulties, car sales have been rising over the course of 2025, although the industry has said the numbers have been flattered by discounts which it says are unsustainable. Discounts have been targeted particularly at electric car buyers as manufacturers try to meet targets set under the government's zero-emission vehicle mandate. So far in 2025 electric sales have made up 21.6% of all sales, the SMMT's preliminary data suggested. That is below the 28% target, although 'flexibilities' in the rules mean the effective target is significantly lower. Dan Caesar, the chief executive of Electric Vehicles UK, a group lobbying for pro-electric vehicle policies, said the June figures were still encouraging. 'The robustness of battery EV sales as a percentage of the market demonstrates we're in a new phase of uptake,' he said. 'Savvy consumers see the trend, and the savings. Better and cheaper BEVs, in addition to genuine competition, should see sales in the second half continue to grow.' New AutoMotive's data also suggested that demand for electric vans had risen sharply. Electric van sales increased by 50% in the first half of 2025 compared with last year to account for one in every 10 sales. Sign in to access your portfolio

A reignited Trump-Musk feud burns Tesla investors, shares of EV company tumble 8%
A reignited Trump-Musk feud burns Tesla investors, shares of EV company tumble 8%

San Francisco Chronicle​

time20 minutes ago

  • San Francisco Chronicle​

A reignited Trump-Musk feud burns Tesla investors, shares of EV company tumble 8%

Shares of Tesla tumbled 8% at the opening bell Monday as the feud between CEO Elon Musk and Trump reignited over the weekend. Musk, once a top donor and ally of Trump, announced that he was forming a third political party in protest over the Republican spending bill that passed late last week. Musk has been highly critical of the bill, which he said would kill jobs and bog down burgeoning industries. In a social media post on Sunday, Trump said that the billionaire owner of SpaceX, Tesla and X had gone 'off the rails' in recent weeks. Investors fear that Musk's companies, which receive significant subsidies from the federal government, could suffer further if his feud with Trump continues to fester. "With the autonomous future ahead and the AI Revolution in full force Musk/Tesla do not need to keep poking the bear as Trump can create more hurdles for Musk/Tesla/SpaceX over the coming years if this political battle gets nastier heading into mid-terms in 2026," Wedbush Securities analyst Dan Ives wrote in a note to clients late Sunday. Tesla shares have been extremely volatile since Musk went all-in for Trump in the run-up to last year's election with the company facing a growing backlash as a result of Musk's embrace of right-wing politics and his role in the Trump administration. Tesla sales plunged 13% in the first quarter compared with the same period last year, and industry analysts believe a large part of that slump is being driven by Musk's affiliation with Trump and far-right parties like Germany AfD. Tesla is also facing rising competition globally, particularly from Chinese automakers such as BYD and Great Wall, which are quickly expanding globally, offering relatively affordable electric vehicles with ultra-fast battery charging systems.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store