Mike Ashley’s retail conglomerate, Frasers Group (LSE: FRAS), has downsized its holding in online fast fashion giant ASOS (LSE: ASC) from 23% to 19%, marking a departure from its recent trend of accumulating shares in the e-commerce powerhouse.
The stake was originally acquired at a reduced price during the fashion retailer’s stock market downturn in May. However, as unseasonal weather took a toll on the fashion sector, ASOS shares struggled to regain their lost ground. Frasers Group’s move reflects the challenges facing the online fashion retail sector.
ASOS recently announced a delay in the release of its financial results for the fiscal year 2023. This delay, which pushes the disclosure to November 1, is attributed to the need to provide auditors at PricewaterhouseCoopers (PwC) with extra time to complete their planned testing. ASOS emphasized that PwC’s outstanding procedures are of limited scope.
Once a standout performer in the e-commerce space during the pandemic, ASOS has faced numerous challenges in the post-lockdown era. With the waning allure of online shopping and increased competition, the company unveiled a turnaround strategy in October 2022. This strategy was designed to streamline inventory management, cut costs, and fortify the leadership team and organizational culture, representing one of the CEO’s, Calamonte, inaugural initiatives.
ASOS shares have dipped by 1.8 pence today, trading at 390.9 pence. Over the course of the year, they have plummeted by 2.6.6%, and the decline is even more pronounced since 2021, with a staggering drop of over 90%.
