Nick Beighton, the chief executive of Asos, is to step down with immediate effect as the online fashion retailer warned supply chain problems and rising costs would affect its profits.
Asos said Beighton and the board had agreed it was “the right time” for him to go. It said after the departure of Beighton, who has been at the company for 12 years with the past six in the role of chief executive, it would continue to focus on international growth.
“Asos’s management and board have spent considerable time over recent months developing and validating a clear strategic plan to accelerate international growth, building on Asos’s undoubted strength in the UK,” said the Asos chair, Adam Crozier, who is to stand down next month to take over as chairman at BT.
“Key to that is ensuring that we have the right leadership in place for the next phase, and the changes we are announcing today are designed to ensure we deliver against our clear strategic intent.”
The company, which has benefited from the online shopping boom during the Covid pandemic with revenues up by a fifth and profits rising by more than a third in the year to the end of August, warned the global supply chain shortage was affecting its business.
“Supply chain challenges loom relatively large,” said the Asos chief financial officer, Mat Dunn, who will lead the business on a day-to-day basis until Beighton’s successor is found. “There is anticipation of extended supply lines and pressure on some brand partners means lower availability than we would want. We are expecting the situation to improve [but] peak [pressure] on global supply chain capacity is in the run-up to Christmas, early January through to lunar new year.”
Asos said there would be “notable cost headwinds” including inbound freight costs, labour cost inflation, outbound delivery costs and Brexit duty.
The company, which reported adjusted pretax profits up 36% to £193.6m in the year to the end of August, said it expected profits to fall between £110m and £140m for its next financial year. This is below analysts’ expectations of £186m.
Shares plunged more than 15% in early trading on Monday and have fallen nearly 50% this year.
Beighton said: “I have enjoyed every moment of my 12 years at Asos. When I joined, there were fewer than 200 people and we had annual sales of around £220m. I leave a business reporting turnover of almost £4bn, with more than 3,000 fantastic Asosers delivering for 26 million customers in 200 markets around the world.”
Asos said revenues grew by 22% year on year to £3.9bn, driven by “exceptional” growth of 36% in the UK. In the US revenues grew 21%, Europe rose by 15% while across the rest of the world revenue growth was just 6%.
The company said its performance across the rest of the world was particularly poor because of how long deliveries take: for example, in Australia customers have to wait 30 days for an order to arrive.
Dunn said the company was aiming to double the size of its US and European business in the medium term. “We want to evolve from a UK-centric brand,” he said.
Russ Mould, the investment director at AJ Bell, said: “Asos seems to have found it hard to keep up with the fast fashion movement in recent years, coming in for criticism for not being able to turn around new product designs quickly, experiencing warehouse problems and poor stock availability. Customers have so much choice with where they buy clothes and competition continues to grow. Asos will need to do something extra to make it stand out from the crowd.”
Earlier this year Asos acquired the Topshop and Miss Selfridge brands for £330m, but Dunn said not to expect a flurry of new deals.
“We have the strength and flexibility on our balance sheet and we have the strategic option and if things meet our criteria we will look at them,” he said. “I anticipate we will look at lots of things but not do very many [deals].”