Online clothes retailer ASOS will turn to a finance boss with experience at Matches and Farfetch - two of the most high-profile British fashion firms to go bust this year - as it aims to turn around its struggling fortunes.
Dave Murray will be the firm’s new chief finance officer, after Katy Mecklenburgh stepped down last year. ASOS noted that he has “more than two decades' experience across a range of finance roles”, including his two most recent stops at Farfetch and MatchesFashion.
He was vice president and senior vice president for finance at Farfetch from 2019-2022, overseeing an initial share price boom followed by a plunge in his last year. After he left, the firm’s struggles heightened, initially escaping bankruptcy with a 2023 rescue deal, before entering administration in January of this year.
Murray then joined MatchesFashion, where he was CFO for 18 months, including its acquisition by Frasers, and its collapse into administration shortly thereafter.
José Antonio Ramos Calamonte, ASOS CEO, said: "I am delighted to be welcoming Dave to the management team. His wide-ranging experience in the retail sector, notably in senior finance positions in several major retail, fashion and e-commerce businesses, will make him a valuable partner in the next phase of ASOS' journey to becoming a faster, more agile and more profitable business."
The firm reported another huge loss today as it continued to deal with its mountain of excess stock. But shares climbed as markets saw signs of recovery for the fast-fashion brand that has struggled in the post-pandemic era, and progress clearing the stock mountain that had been a “ball and chain” for the business.
Revenue fell by 18% to £1.5 billion for the six months to 26 March, which the retailer said was “a result of the cost-of-living challenges which particularly impact the younger ASOS customer demographic”. Increased discounting to get rid of old stock, which has been a major priority for ASOS, also played a part in the revenue decline.
The firm successfully cut costs, especially at warehouses, thanks in part to reducing its massive stock pile. But its losses only dipped by 7%, to £270 million.
Looking ahead, ASOS expects to see things turn around soon. It said it should be cash-positive for the year, and sales should start growing again over the summer.
Ramos Calamonte said: “ASOS is becoming a faster and more agile business, and we are reiterating our guidance for the full year as we lay the foundations for sustainably profitable growth in FY25 and beyond."
The shares rose by as much as 10% to 369p. However, that still leaves them down 7% this year and 95% below their peak in 2018.
Russ Mould, investment director at AJ Bell, said: ““The main thing that currently matters with ASOS is clearing its mountain of excess stock, a ball and chain that’s been dragging the business down for a long time. It’s ahead of plan on this front, hence the share price has enjoyed a pop.
“Naturally, having to flog old stock means selling at a discount and that eats into profit margins. It’s all well and good to run the stockpile down but that also fosters a nasty habit of customers getting used to very cheap prices. Weaning them off the habit will be hard and could be as big a hurdle to clear as the current excess inventory problem.”
