Sales at ASOS and boohoo hit by rising inflation

Online fashion brands ASOS and boohoo have recorded a decline in sales driven by inflationary pressures and a hike in returns.

ASOS sales during the spring period were down from around £988 million in 2021 to £983 million this year.

The retailer’s chief operating officer Mat Dun said that an increase in returns had been set off by rising inflation.

“What is now clear, based on the significant increase in returns rates that we have seen, is that this inflationary pressure is increasingly impacting our customers’ shopping behaviour,” said Dun. “It is too early to tell for how long the current pattern of customer behaviour will continue but we are taking swift and decisive steps to minimise the impacts whilst continuing to deliver against the strategic initiatives we laid out in November that will ensure that ASOS builds for the long-term.”

ASOS was hit with supply chain constraints and volatile market demand last year, driven by a significant increase in Covid-19 caseloads across the UK, Europe, and US.

Boohoo also said that its sales had been impacted by the “ongoing normalisation of returns”, with pandemic-related and inflationary factors negatively impacting costs within its supply chain.

Overall the company’s revenue was down by eight per cent to roughly £446 million in the three months to 31 May, declining from £486 million in the previous year.

The results follow an unsuccessful financial year for boohoo, which recorded a pre-tax profit decline of 94 per cent for 2021.

“We have seen promising signs from the Group's sales performance in the UK, which has improved month-on-month in the period and we are looking ahead towards our key summer trading season as holidays ramp up and customers look to the latest fashion from across our brands,” said John Lyttle, chief executive, boohoo. “Looking forward, we will continue to focus on optimising both our financial and operational performance to ensure the business is well placed to take advantage of future growth opportunities."

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