Online fashion retailer Asos has recorded annual pre-tax losses of £296.7 million for the year ended 3 September.

Asos said that adjusted loss before tax hit £70.3 million over the 12-month period compared to profits of £22 million last year.

The company blamed its poor results on a challenging market backdrop of “weak consumer sentiment” and higher inflation.

The figures were also driven by the retailer’s attempts to improve profitability and increase financing costs through its 'Driving Change' agenda.

Asos chief exec Jose Antonio Ramos, who was appointed in 2022, revealed a 12-month turnaround plan last October focused on reducing costs and improving operating performance.

When he first joined the business last year, the Asos boss warned that the organisation simply had too much stock, which ultimately eroded its profitability and "destabilised its balance sheet".

The retailer was also stocking brands that were proving unprofitable for the company.

While the retailer warned that it anticipates a further sales decline of between five and 15 per cent next year, it expects positive adjusted earnings and material cash generation generated by stock sell-through in 2024.

"FY23 was a year of good progress for ASOS in a very challenging environment and I am proud of what the business has achieved," said José Antonio Ramos Calamonte, chief executive. "We have reduced our stock balance by [around] 30 per cent, significantly improved the core profitability of the business, strengthened our balance sheet, and refreshed our leadership team."

Asos said that it is likely to return to growth and an EBITDA-margin around pre-covid levels by 2025.

Earlier this week, reports suggested that Asos is eyeing a sale of the Topshop brand it acquired in 2021.

Asos bought Topshop from the administrators of Arcadia group after its collapse in a deal worth £265 million. The deal also included the Topman, Miss Selfridge and HIIT brands.

Now, three years later and in a drastically different retail environment, Asos is reportedly looking to offload the former crown jewel of Sir Philip Green's former retail empire.

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