Online Retailer Struggles with Declining Revenue and Takeover Offer

  • Suppliers cut ties with Asos due to falling profits
  • Asos fell off FTSE 250 index last week
  • Half-year profits and revenue dropped
  • £87.4m loss before tax in six months ended February 2023
  • 8% drop in revenues to £1.8bn
  • Adjusted EBIT loss of £69.4m, down from £26.2m profit
  • UK sales down 10%, European flat, US sales down 7%, rest of world down 12%
  • Turkish retailer Trendyol made a £1bn takeover offer in December
  • Trendyol backed by Alibaba, no active talks between firms now

Suppliers to Asos have started cutting ties with the online retailer as credit insurers withdrew cover due to its declining profits. The company fell off the FTSE 250 index last week, following a report of falling half-year profits and revenue. In the six months ended February 2023, Asos reported a loss before tax of £87.4m and an 8% drop in revenues to £1.8bn from £2bn the previous year. The adjusted EBIT loss was £69.4m, down from a profit of £26.2m. Sales figures showed UK sales down 10%, European sales flat, US sales down 7%, and the rest of the world down 12%. Reports emerged of a £1bn takeover offer from Turkish retailer Trendyol in December, backed by Alibaba, but active talks between the firms have ceased. Asos stated that trade credit insurance cover has tightened across the industry with no impact on trading ability.

Factuality Level: 8
Factuality Justification: The article provides accurate and objective information about Asos’ financial performance and the potential takeover offer from Trendyol. It cites sources such as The Times and The Sunday Times for its information and includes relevant details about the company’s financial situation and the possible acquisition.
Noise Level: 3
Noise Justification: The article provides relevant information about Asos’ financial performance and a potential takeover offer from Trendyol but lacks in-depth analysis or actionable insights.
Financial Relevance: Yes
Financial Markets Impacted: Asos’s suppliers and potential takeover offer from Trendyol
Financial Rating Justification: The article discusses Asos’s financial performance, credit insurance withdrawal impacting its suppliers, and a reported takeover offer from Trendyol, which affects the company’s stock value and operations. This makes it relevant to financial topics and impacts financial markets through potential market reactions to these events.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: There is no extreme event mentioned in the text.

Reported publicly: www.retailsector.co.uk