ASOS returns to growth, but customer base is still smaller

ASOS recorded growth in the value of products sold in the final quarter of its financial year, which ended on 30 August. The increase was in the low single digits, following a year in which that value fell by 12 percent. The online fashion retailer also reported its first quarter-on-quarter increase in customer numbers since 2022.

The recovery is still at an early stage. The value of products sold was down 5 percent across the full financial year. ASOS ended August with 16.4 million active customers, compared with 17 million a year earlier. Its customer base grew compared with the preceding quarter, but remains smaller than last year.

ASOS reported growth in the UK and Germany during the second half of its financial year. Its US business grew in the final quarter. Womenswear performed better than the wider business, with the value of products sold rising 8 percent in the second half.

Partner brands fulfil more orders

ASOS added around 30 partner brands during the year. It also expanded two fulfilment models. In one, ASOS stores a partner’s stock and handles delivery and returns. In the other, the partner ships orders directly to ASOS customers.

Together, these models accounted for 21 percent of partner brand sales value, up by more than 10 percentage points from a year earlier. They allow ASOS to expand its range without buying all the stock itself.

ASOS says its improved gross margin was also helped by selling more products at full price and reducing returns. The retailer has taken several steps to address return costs, including a tool that shows UK customers their personal return rate.

ASOS has also reduced its warehouse capacity. Earlier this year, Marks & Spencer bought one of its UK distribution centres. ASOS says the sale of that site and a US warehouse has lowered costs and debt.

The reported growth refers to ASOS’s gross merchandise value (GMV), which includes activity from its fulfilment partners. It does not establish that company revenue has returned to growth. ASOS has not published an exact figure for fourth-quarter GMV growth; its full-year results are due on 5 November.