Asos expects £14m hit from halting trade in Russia after invasion of Ukraine
Online fashion retailer Asos expects to take a £14m hit to its profits and a 2% reduction in growth, following its decision to stop trading in Russia in response to Moscow’s invasion of Ukraine.
The forecast came as the company swung to a £15.8m pre-tax loss in the six months to the end of the February, compared with £106.4m profit a year earlier, when it was among the internet retailers benefiting from the lockdown e-commerce boom as shoppers stocked up on leisurewear to relax in while stuck at home.
Sales in the UK grew by 8% to £895.5m over the period, and by 11% in the US. However, Asos said supply chain disruption had led to reduced availability of some products and had prevented it from selling some of its newest lines.
The online retailer’s share price was up more than 5% at lunchtime on Tuesday following its half-year results announcement, at about £16.20. A year ago its shares were trading at more than £50.
Asos said sales had been boosted by the addition of Topshop brands to its website, particularly in the UK, US and Germany. The retailer acquired Topshop, as well as the brands Topman, Miss Selfridge and the activewear range HIIT, in early 2021, following the collapse of Sir Philip Green’s retail empire during the first year of the pandemic.
However, it issued a note of caution in its outlook for the rest of the year, as shoppers are expected to cut back on spending amid rising inflation and the cost of living crisis.
Asos said it hadn’t yet seen an impact on consumers’ behaviour or their spending, but predicted this might change in the coming months as shoppers face higher energy bills and tax increases.
Asos, which has not had a full-time chief executive since Nick Beighton quit last October, said it had bought
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