Out of fashion: Asos ‘curse’ has struck again
Share price tumbles following the departure of CEO Nick Beighton
The online fast fashion giant Asos began the year triumphantly “scooping up the remains of Philip Green’s empire”, said Nils Pratley in The Guardian. It has been downhill ever since. This week, the group (founded in 2000 and focused on twentysomethings) warned that profits next year could be more than a third lower than expected – prompting a share price tumble of 13%, and the immediate exit of CEO Nick Beighton.
Asos’s market value has now halved to £2.4bn since the start of the year. There’s “something familiar in this story for long-term Asos watchers”: every time the share price hits £60 it halves within 12 months. It seems “the curse has struck again”.
“Sudden departures unnerve investors when detail is absent,” said Lex in the FT, particularly in the midst of a global growth drive. Whoever takes over from Beighton should add “a flak jacket” to their “wardrobe essentials”.
Asos blames “supply-chain hell”, said Alex Brummer in the Daily Mail. “There must be some sympathy for that”, but it’s far from the whole story. Asos has allowed “financial ambition” to “run far ahead of market changes” – with “cataclysmic” results. “Watching all this from Monaco, Philip Green could be forgiven a wry smile.”
Beighton has done a “great job” at Asos but is “leaving on a bum note”, said Oscar Williams-Grut in the London Evening Standard. There was “no suggestion” Beighton was on the way out - now he’s gone overnight, “albeit hanging around until the end of the year to help with handover”.
Nick Bubb, an independent retail analyst, told the Standard that online retailer shareholders will be “disturbed” to hear that Asos have “thrown the proverbial cat amongst the pigeons” with the shock news that Beighton is stepping down. He will be a “big loss for the company”, said Market.com’s Neil Wilson.