In the last quarter of its financial year, ending 30 August, ASOS saw a slight rise in the value of goods sold, marking a turnaround after a 12 percent decline the previous year. This period also marked the first time since 2022 that the online fashion retailer experienced a quarterly increase in its customer base.
Early Signs of Recovery
Despite these positive signs, the recovery is in its initial stages. Over the entire financial year, the value of products sold decreased by 5 percent. As of August, ASOS had 16.4 million active customers, down from 17 million the previous year, though this figure represents an increase from the prior quarter.
During the second half of the financial year, ASOS experienced growth in the UK and Germany, with its US operations also showing improvement in the final quarter. Womenswear outperformed the overall business, with an 8 percent increase in the value of products sold during the latter half of the year.
ASOS has expanded its partnership strategy, adding approximately 30 new brands and enhancing two fulfillment models. In one model, ASOS manages a partner’s inventory, delivery, and returns, while in the other, partners directly ship orders to ASOS customers. These models now account for 21 percent of partner brand sales, a significant increase from the previous year, enabling ASOS to broaden its offerings without holding additional stock.
The shift towards third-party fulfillment and a reduced warehouse presence has contributed to an improved gross margin, which ASOS attributes to increased full-price sales and fewer returns. To tackle return costs, the retailer has introduced a tool for UK customers to track their return rates. Additionally, the sale of a UK distribution center to Marks & Spencer and a US warehouse has helped reduce costs and debt.
The reported growth pertains to ASOS’s gross merchandise value (GMV), which includes transactions from fulfillment partners. This does not confirm a return to revenue growth. ASOS has not disclosed the exact fourth-quarter GMV growth figure, with full-year results scheduled for release on 5 November.
