After Asos showed the “strongest sign yet” of its transformation strategy paying off, Retail Week explores the opportunities and challenges ahead for the fashion retailer
It was Asos that delivered a sprinkling of positivity to the City today after updating on its trading performance and strategic progress for the first half of the year to March 2, 2025.
While the fashion retailer reported a decline in group revenue, its loss before tax narrowed from £270m to £241.5m and EBITDA for the period was up nearly £60m.
Despite ongoing tariff travails and an uncertain global outlook, Asos boss and the driver of its ongoing turnaround strategy, José Antonio Ramos Calamonte, said the results are the “strongest sign yet” that its transformation strategy is bearing fruit.
He is also confident in Asos’ ability to adapt as a result of its “very widespread supply chain” – with 25% of its own-brand products being sourced from China, something he called “clearly below the average of the market”, and the rest from Turkey, Morocco, Eastern Europe and the UK.
While the number of active customers decreased 16% year on year, the average basket value increased 4% to £42.38 during the first half. Asos said this was a reflection of progress in its bid to focus on improving the profitability of its customers and reducing its promotional activity. It credited its progress to the test-and-react business model, which allows the business to launch small batches of products and reorder at speed if successful.
Looking ahead, Ramos Calamonte was candid about both the headwinds and opportunities during the second half of the year for the brand but remained composed and confident as the retailer continues on its bid towards achieving sustainable and profitable growth.
US prospects
In what was the most pressing topic for Ramos Calamonte to address, he said that as the US outlook remains ever-changing, Asos is monitoring it “very closely” and is taking the only option of a “flexible approach” to the situation.
Speculation around what the tariffs mean for Asos and its US arm follows the closure of its main US distribution centre in Atlanta, Georgia, as it now serves the market via a “hybrid model”. Asos supplies the US from its fully automated warehouse in Barnsley, Yorkshire, as well as a smaller facility in the US and directly via its brand partners, something Ramos Calamonte says he has been “encouraged” by since the shift in operations.
Ramos Calamonte said it is hard to predict what the tariff changes mean for the business but he is confident Asos is “well prepared” to react to the challenges ahead.
“I am concerned about a lot of things but I want to make sure that we are working on it rather than just being concerned,” he said. “One of the things that is interesting is our exposure to China sourcing in the US is not that big. We are confident that being less than 5% [of sales] gives us the capacity to absorb the impact, whatever the impact might be.”
Asos chief finance officer Dave Murray added that because goods valued at less than $800 can enter the US duty-free under the de minimis rule, and Asos orders generally do not exceed this, it was unaffected.
The de minimis rule is set to change from May 2 but Murray added that Asos is focused on having flexibility within its operations and continuing to supply US consumers with “great products”.
And with chancellor Rachel Reeves expected to review the UK’s de minimis customs treatment of low-value imports to “act on practices that undercut fair trade”, including the “dumping of cheap goods into the UK”, this could be an area of opportunity for homegrown Asos.
Ramos Calamonte did not deny that this could be an area of opportunity and said the business “probably will benefit” if action is taken – but he wants Asos to win by ultimately fulfilling consumer wants and needs.
“Probably there will be a benefit but we want to win by delivering to our consumers the best possible product. That’s how we win in the long term, so this is where we put all our energy,” he said.
“We believe the market should be fair and that’s why our obsession is what we can do, what we can control and delivering value to our consumers.”
Leaning into loyalty
Arguably, what Ramos Calamonte appeared most excited about is the introduction of its new loyalty scheme, Asos World.
Asos World launched last month and has been rolled out initially to a small group of shoppers in the UK. While this isn’t the first time Asos has trialled a loyalty scheme, having previously offered a points-based system called A-List until October 2018, this time things are expected to look slightly different for customers opting in.
“This is not a programme created around the idea of discounts, it is a programme created around the idea of access to exciting experiences in fashion,” said Ramos Calamonte. “These experiences can be early access to new products, certain brands, back-in-stock and specific exclusive events.
“One thing that is already working with the pilot we launched is giving access to our AI stylist. What we have seen is that the outcome so far is quite exciting. We see that the consumers who interact with the AI stylist increased by 50% the amount of products that they save for later and we know that save-for-later is a leading indicator of our sales because more or less 30% of our sales come from items that have been saved previously.”
With a full rollout expected during the second half of the year, allowing all customers to be a part of the programme, Ramos Calamonte has high hopes that this will supercharge its bid to win over fashion-loving twentysomethings.
Time for Topshop
The other hot topic for the fashion retailer is the return of both its Topshop and Topman brands, something Ramos Calamonte said the retailer’s team has done a good job at creating excitement around.
“We have always been very excited about Topshop and we have spent pretty much two years revealing the product assortment to make sure that it is the most exciting and inspirational to customers,” he said. “The brand heat is clearly being generated and I think the time has come for it to come back and to be much more present with consumers in the UK, of course, but also globally.”
The first step of Topshop’s return is via Topshop.com, with the website relaunch scheduled for the second half of the fiscal year. And after numerous hints on social media of late, he confirmed a bricks-and-mortar return remains on the cards but emphasised this would “not be the first step in the journey”.
“Eventually we will come back to a physical presence,” he said. “We already have agreements with certain wholesale partners where we will be able to see Topshop live and we are talking to some more.”
Murray added: “If a standalone store were to come back, it would be one that we run; we wouldn’t put that in the hands of anyone else. But for now, we’re focused on physical access through wholesale partners.”
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