Online fashion retailer ASOS (LON:ASC) has suffered from problems both of its own making and due to the market. The full year figures due to be published on 16 October will provide an indication of how well the problems were dealt with and how much still needs to be done.
ASOS has lost its position as the largest AIM company and it is valued at around two-thirds of boohoo.
There has already been guidance to expect pre-tax profit to be in the range of £30m-£35m in the year to August 2019. That is after a £47m charge relating to warehousing. In the year to August 2018, pre-tax profit was £102m.
Revenues are expected to increase from £2.42bn to £2.71bn, but margins have been reduced due to the need to clear products, particularly in last couple of months of the financial year.
The UK market has been relatively strong, and the figures will provide an indication of how the year ended and how trading is going in the new financial year.
US and European sales are growing but not as fast as in the UK. They may be catching up.
There have been problems with warehouses in the US and UK. The US problem has hampered the progress in that market because there was strong demand but an inability to service it efficiently.
Automation did not go smoothly in the UK warehouse and it will be interesting to find out if these glitches have been ironed out. If not, then ASOS will have to go back to a people driven scenario, which would be more costly but could at least ensure that orders are delivered.
It is important that the warehouses are running smoothly because a busy trading period is on the horizon. If there are any problems, then it will hold back the recovery of the business.
ASOS is already reshaping its board of directors. It has appointed four new independent non-executive directors to replace two non-executive directors, Hilary Riva and Rita Clifton, who will be stepping down.
ASOS believes that its increased size means that it requires a larger board. This comes ahead of a full year trading statement for what has been a disappointing 12-month period.
Karen Geary has been involved with human resources at Sage, Micro Focus International and the US subsidiary of Wandisco, as well as being a non-executive director of National Express. She will chair the remuneration committee.
Luke Jenson is boss of Ocado Solutions, the technology division of the online grocery retailer. He has also worked on the online business of Sainsbury.
Mai Fyfield has a media background, having been chief commercial and strategy officer at Sky and is currently a director of BBC Commercial.
Eugenia Ulasewicz has experience of the retail sector having been president of Americas at Burberry. She is also a non-executive on a number of boards, including Signet Jewellers.
ASOS made mistakes last year and it needs to show that it has sorted out its problems, or at least going some way towards doing that.
ASOS is still one of the major online fashion retailers, but any more slip-ups could hamper its image and its revenues.