ASOS recorded strong global sales growth of 21% for the year to 29 February on 41.1 million orders, a 19% rise on the previous year. However, it is raising capital to weather the current climate.
UK sales at ASOS rose 20%, EU sales by 21% and US sales by 25% in the year 2019/20 financial year driven ,the company says, by a focus on reduced costs, revitalised product and presentation through social media.
However, with global lockdown measures being introduced, sales have this year fallen by 20 to 25%, so far, the company warned. The retailer’s warehouses remain, controversially, operational with social distancing measures in place, while the majority of its head office staff are working from home.
“ASOS had a strong start to the year, making significant progress against the priorities we set out and delivering a better than anticipated first-half performance, driven by the operational improvements we are making to the business,” says CEO Nick Beighton. “Along with other businesses we have been significantly impacted by the Covid-19 outbreak.”
He continues: “Our first priority was to quickly put in place the necessary measures to ensure the health and wellbeing of our people. I have been extremely impressed with the pace of change and the flexibility our teams have shown in adopting these new ways of working. I’d like to thank them all for the way they have responded.”
He concludes: “The Covid crisis is clearly going to continue to be tough for everyone and the short-term outlook remains highly uncertain, but the measures we have taken ensure we are able to be clearly focused on making sure that ASOS emerges as a stronger and better business.”
ASOS and H&M raise capital to see them through
Following on from the results announcement, ASOS has also announced a proposed placing of up to 18.8% of its issued share capital to ensure it has protection against a prolonged downturn, and is also in discussions for secure a further £60m-£80m extension to its RCF.
Fellow fast fashion brand H&M has also signed a new 12 months €980m revolving credit facility with a six months extension option in order to “further strengthen its liquidity buffer and financial flexibility in response to the Covid-19 situation”, it said in a statement. “The H&M group’s liquidity remains good. The group is continuing its work to set up a combination of different financing solutions”.
The new facility is in addition to the company’s undrawn €700m RCF signed in 2017 and maturing 2024. The facility was supported by a group of H&M Group’s relationship banks. SEB acted as co-ordinator, joined by BNP Paribas, Danske Bank, Standard Chartered Bank and Commerzbank.
