Clothing brand ASOS revealed that their recent sales growth has slowed as people worldwide deal with the many uncertainties regarding COVID-19. An online fashion retailer that ships worldwide, ASOS mainly signaled that their business in Britain has steadily declined, though it appears sales have declined in many countries for the brand.
While sales rose about 21% from February to June of 2021, the last few weeks have brought much lower sales than initially expected. For economists and clothing analysts, many expected fashion industries to continue to do quite well for the rest of the year. While these problems are only relevant to one brand, this could be a signal that other companies may have similar issues in the near future.
According to the company, this sharp drop in sales for many reasons. Travel regulations have continued to be very confusing for consumers, regardless of where they are located. While some travel nationally in countries has become somewhat easier, international travel is still quite complex. Many people are confused about what they can and can’t do when it comes to travel, and some airline companies have canceled hundreds of flights to stay on top of regulations and demands.
These travel worries and confusions have resulted in people not being able to successfully book holiday trips. Naturally, this has resulted in people no longer needing a vacation or summer wardrobe — which normally drives summer sales.
The uncertainty over the COVID-19 pandemic has also slowed sales, according to ASOS. Globally, all countries are struggling to deal with the new Delta variant of the virus. In certain places, there are some worries that this new variant will result in more lockdowns or regulations, especially if it can negatively affected fully vaccinated people.
Lastly, ASOS suggests that poor weather and an unseasonal summer are to blame for the latest decrease in sales. In Britain especially, people varied one week from looking up coats to evening gowns the next. This unpredictable weather has resulted in inconsistent consumer demand for the company.
While normally an online clothing distributor, ASOS is attempting to branch out in the United States, which may help their sales in the long run. In February, ASOS bought the brands Topshop, Topman, Miss Selfridge, and HIIT. Just this week, ASOS also formed a joint venture with Nordstrom, resulting in more Topshop clothing to be sold in the United States retailer’s stores.
While ASOS admits this decline in sales, the company still has a positive outlook for the rest of the year, even if they’ve had to tailor it. They forecasted that their underlying growth rate for the 2020-2021 year will be mostly in line with their previous year’s period. However, they still believe they’ll make a profit this year.
Unlike most other retail companies, ASOS thrived in online sales throughout the pandemic and never had to shut down stores — mainly because they didn’t have any stores to shut down worldwide. As they start to sell brands in stores in the United States, however, they’ll obviously have to deal with new potential problems, especially if COVID-19 uncertainties persist.