Asos cuts marketing spend by 8% to prioritize profitability under new CEO’s leadership

Asos, the international online fashion retailer, has reduced its marketing spend for the six months to 28 February by 8% year on year in a bid to restore profitability. The company’s new CEO, José Antonio Ramos Calamonte, has prioritized profitability over top-line growth, resulting in a cut from £119.7m to £109.9m. Despite this, marketing spend remained constant at 6% of sales, as the latter dropped from £2bn to £1.84bn due to Asos’ clearance of stock and a more challenging trading environment.

Calamonte, who took up the role in June 2022, said that the company’s focus is on improving core profitability and prioritizing order economics over top-line growth. He expressed satisfaction with the progress made so far, despite the challenging trading conditions.

Asos commented that it reduced its investment in customer acquisition and curtailed marketing spend in periods and geographies where consumer demand was weak. The company marketed less in certain periods in the UK, where sales declined by 10% against a backdrop of weak consumer sentiment and a challenging online retail environment. It also reallocated marketing spend out of the US, where sales fell by 7% at constant currency. However, there was little detail on any ensuing shift in its results, with brand marketing not mentioned at all and performance marketing only mentioned once in a summary of business in EU markets.

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