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Asos warns on profits as chief executive leaves

Online fashion retailer Asos has announced the immediate departure of chief executive Nick Beighton after six years in post and warned that profits could fall by more than a third this year because of supply chain problems and Brexit.

Shares in the group fell by almost 16 per cent in morning trading in London in response.

Asos said in a statement that it was “the right time” for Beighton to step down, and that a search was under way for a successor to expand the business internationally. Chief financial officer Mat Dunn will become chief operating officer and will handle the daily running of the business.

The group also said that former Punch Taverns chief Ian Dyson would replace Adam Crozier as chair.

In the year to the end of August, overall group sales at Asos increased 20 per cent to £3.9bn boosted by the group’s beauty division and the integration of Topshop, the former Arcadia brand that it bought in February.

Pre-tax profits increased 25 per cent to £177m but were almost a third below analyst expectations.

Its latest targets for international growth include doubling the size of the business in Europe and the US and adding £1bn to own-brand sales. It will aim to reach £7bn in annual sales in the next three to four years.

It is the latest in a string of retailers to warn that supply chain and labour costs will weigh on margins next year.

Longtime rival Boohoo said last month that it had been affected by volatile demand because of last-minute event and holiday cancellations over the summer and Covid-related costs.

Asos said on Monday that it was facing “industry-wide supply chain pressures” and tough comparable figures from the first half of the year, when online shopping was boosted by long periods of lockdown.

It has also increased its marketing spending to counter slowing growth.

Analysts at Bloomberg warned that even as socialising resumed, “margin pressure from normalising return rates and freight inflation can’t be offset by higher-margin occasionwear and better markdowns” and that expanding the business would need high levels of capital investment.

Dunn, who takes over the running of Asos with immediate effect, said that while “performance in the next 12 months is likely to be constrained by demand volatility and global supply chain and cost pressures, we are confident in our ability to capture the sizeable opportunities ahead”.

Asos also announced the appointment of Jorgen Lindemann, chair of the Danish online fashion retailer Miinto, to its board.

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