Asos pre-tax profits plunge 87 percent
British e-commerce giant Asos has seen its pre-tax profits slide 87 percent for the six months period ending 28 February. The company stated its sales have since stabilised but dropped in Google and search rankings when it adjusted its navigation resulting in a drop in website visits.
Asos Chief executive Nick Beighton in statement said the company identified a number of things it "can do better", and that heavy investment in its platforms gave the retailer "increased confidence" that its performance would improve in the second half of the year. The company also iterated its financial guidance for the year remained the same.
Asos previously issued a warning on its profits and in December said price matching with rival e-tailers had not led to a significant sales increase. Its shares at the time fell 40 percent, although they were up 3 percent this week at the time of its latest financial announcement.
"We now have the tech platform, the infrastructure, a constant conversation with our growing customer base who love our own great product and the constantly evolving edit of brands we present to them," said Mr Beighton.
Earlier this month Asos announced its was updating its returns policy, specifically allowing customers to return unwanted items from 28 days to 45 days. The company also said it would crack down on 'serial' returners, specifically individuals who buy merchandise to photograph for social media and subsequently return these.
Asos has implemented several strategies to improve its bottom line, including launching 200 microsites which perform alongside its mean e-commerce channel.
According to the BBC, Asos made changes to the way customers navigate around its main website, particularly in how new products were displayed with the purpose to make these clearer. These changes had an impact on its search engine rankings, which affected the number of people being directed to the main website.
Asos said that the changes resulted in a slowdown in the growth of younger customers, but UK sales rose 16 percent due to orders from existing customers.
Photo credit: Asos website, article source: BBC