The online fashion retailer, Asos, is expecting to take a £14 million hit to its profits and a 2% reduction in growth after it decided to stop trading in Russia, given that Russian sales had previously accounted for around 4% of its business.
The online fashion retailer's latest reports showed that it swung to a £15.8 million pre-tax loss in the six months to the end of February, compared with a £106.4m profit a year earlier. The company blamed on “significant cost inflation” in both labour and freight as well as the end of Covid support measures.
On the other hand, half year revenue grew 4% to £2 billion, although challenges related to the supply chain, such as maintaining stock levels, weighed on performance.
Asos said sales had been boosted by the addition of Topshop brands to its website, especially 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.
Nonetheless, Asos projects a challenging six months ahead, as high inflation leaves consumers with less spare cash to spend on clothes, although it hopes the returns of holidays and nights out would boost sales.
