Fashion fail? Asos loses long-time CEO and warns on profits as shares fall again

Many of the online retailer’s battered investors felt they’d had too many surprises and ran, writes James Moore

The retailer says buying habits of customers has changed during the pandemic (Asos)

Fast fashion is looking for a new face of the industry after CEO Nick Beighton’s sudden departure from Asos, which hurriedly brought forward its results to coincide with the announcement.

The latter were always going to give investors a fright. The king of online clobber clobbered them with its warning of slower growth and lower profits than they had expected over the next year.

The shares had already endured a rocky summer. All that combined with a boardroom shake-up - chairman Adam Crozier’s departure’s for BT was announced in August - and it’s no wonder that some of them took it as a signal to run away fast.

To be fair, some of the company’s string of recent difficulties are due to factors beyond its control. Blockages in the global supply chain have made it tough to get goods on both virtual and real shelves across the board. Then there’s Brexit, which is hurting just about everyone, with its increased customs duties and yet more delays. Labour shortages mean workers have to be paid more too.

All this just as customers resume their old habits of buying clothes in bunches before trying them on and sending half of them back. During the pandemic, when shoppers flocked to online checkouts, they were less inclined to do this. When you’re dressing for comfort the fit is less important.

Asos CEO Nick Beighton, once the face of fast fashion, is departing the company he led for six years (PA Archive)

Against that backdrop, losing your CEO of six years - Beighton is a12 year veteran of the company who joined when it was a tiddler and played a key role in turning it into the giant it is today - looks more than a little careless.

Both sides felt it was time, the company said, as they always do. We’ll soon unveil a new strategy. A fancy new set of corporate threads demands a fashionable new CEO to walk down the global catwalk, preferably someone who’s still going to look good in five years time.

Asos is hoping to find a global wonderkid with a digital background. But people like that are tough to find and very expensive. It takes millions just to get them out of bed in the morning.

They’ll have to be a snappy dresser indeed if they’re to deliver on the promise of sales of £7bn within three to four years. That’s a substantial increase over the £3.9bn Asos served up during the 12 months to the end of August.

Finance director Mat Dunn has been charged with keeping the show on the road and the wolves from the door while the search is conducted.

He’ll need to be at the top of his game. Profit warnings are the sort of trouble that comes in threes, which is why plenty of big investors head for the exit after the first regardless of the circumstances.

The way this one has been handled doesn’t inspire much confidence. Ian Dyson, who is taking Crozier’s role in chair, has the job of restoring it. His task will not be an easy one.