British online fashion retailer Asos has reported a big loss as its customers spend less on fashion due to the rising cost of living. The BBC reports that the business posted a loss of almost £32m ($36m) in the 12 months to August, compared to a profit of £177m last year.
The company expects shoppers to cut further this year as the cost of living soars. Inflation returned to its highest level in 40 years in September, and BBC research showed people are feeling increasingly worried about their finances.
CNN reported on October 19 that Goldman Sachs had downgraded its economic outlook for the UK, predicting “a deeper recession” in which activity will contract by 1% in 2023. UK Prime Minister Liz Truss , resigned on October 20 after weeks of criticism of his economic policies, causing “relief” in the markets but still great uncertainty, reports BBC News.
Asos, which owns the Topshop and Topman chain stores on the high street, said it was currently facing “an incredibly difficult economic environment”. The retailer said it expected to take another loss in the six months to the end of February, in part due to the need to cut prices to clear inventory.
Asos and rival Boohoo, which were seen as poster children for the shift to online shopping, profited from the pandemic as locked-down shoppers splashed online. But they struggled as people returned to stores.
Asos said in June that cash-strapped consumers were also returning more items bought online, hitting its profits.