ASOS is set to drop out of the FTSE 250 after a prolonged period of poor share price performance amid falling revenues and deep losses.
Once the shining light of London’s technology sector, ASOS shares are down 30% so far in 2025 and are worth less than 5% what they were at their peak.
“Fast fashion group ASOS looks set to be kicked out of the FTSE 250 in the latest blow to the company’s reputation,” said AJ Bell investment analyst Dan Coatsworth.
“ASOS moved from AIM to the Main Market in February 2022 with the aim of enhancing its corporate profile and recognition, as well as attracting a broader group of institutional shareholders.
“At the time, it had an ambitious growth strategy and was determined to bounce back from a post-pandemic hangover which saw a big slowdown in sales growth across the retail sector. Unfortunately, its struggles have got worse and the shares have limped along. Competition has remained fierce, consumer trends have shifted, and ASOS has been left behind.”
ASOS reported a 13% drop in adjusted group revenue for the interim 26-week period to 2nd March. Gross margins did improve slightly to 45% but the group still reported a £70m loss before tax.
The worrying thing for investors is that ASOS has thrown the kitchen sink at trying to improve efficiencies and return to profitability, but it doesn’t seem to be working for them.
ASOS have even started banning customers who make too many returns. This isn’t an action taken by a company confident in its growth prospects.
One has to look at the £360m market and wonder how much further it could fall.