Asos is planning to chop 200 roles from its head office as it looks to restructure its business in the face of mounting difficulties post-pandemic due to intense competition from cheaper rivals, according to reports.
Asos said that current set-up was “no longer suitable for today’s business priorities and context… We need to move faster and deliver more”, according to a document seen by The Mirror.
A consultation on the proposed losses has begun, with impacted areas including business analysts, all engineering managers, and platform leads. However, it said the cuts will be made along with the creation of new roles in tech.
In a statement to The Mirror, the company said: “We’ve entered into a collective consultation with members of our technology team around a proposed restructure to drive greater innovation and agility. It would be inappropriate to comment further while the consultation is ongoing.”
For the last year, Asos’ stock price has languished at lows not seen since its first two years of listing on the LSE and earlier this year, it announced a £120m pre-tax loss for the first half of 2024.
The online fashion seller has been struggling to turn around the business after a boom in online shopping during the pandemic by selling off piles of unwanted stock and attempting to improve its fashion credentials. Like other businesses, it has also struggled with weak demand and high inflation.
Early in September, it announced the sale of Topshop and Topman to a joint venture with Heartland. Asos will retain a 25 per cent stake in the brands.
The Topshop and Topman brands are together now valued at £180m but Asos bought them – along with Miss Selfridge and HIIT – in 2021 from Philip Green’s collapsed Arcadia group for £265m (excluding stock).
It was later revealed that Asos had declined a much higher bid of £215.5m made jointly by Shein and ABG, according to a report in the Sunday Times.
Shein set to overtake Asos in UK market by 2027
Cheaper rivals Shein and Temu have flourished while Asos has struggled. Shein doubled its profit last year to more than £2bn, making more than the Swedish fashion group H&M and the UK’s Primark and Next.
Shein is expected to overtake ASOS as the UK’s sixth largest apparel retailer by 2027, while ASOS is expected to fall to 10th place, according to GlobalData.
“Shein’s winning combination of highly competitive prices and omnipresent social media marketing will allow it to overtake UK competitor ASOS,” Louise Deglise-Favre, Apparel Analyst at GlobalData said earlier this year.
“These retailers should focus on agility and price to ensure their product offerings can compete with Shein for the attention of young shoppers, and they must effectively leverage the power of social media and collaborations to regain top of mind appeal,” Deglise-Favre added.
Asos has not yet responded to a request for comment.