ASOS sales hit by COVID-19, shares rise after placing

ASOS (LON:ASC) shares jumped on Wednesday as the group raised £247 million through a placing to help strengthen the business amid the evolving COVID-19 outbreak.

Shares in the British online fashion retailer were up by 30% during trading on Wednesday.

Before the virus outbreak hit the UK, sales at the online fashion retailer were particularly strong.

Indeed, for the six months to 29 February, total sales rose by 21% to £1.6 billion.

However, demand has been “significantly impacted” since the government introduced measures to contain the spread of the illness.

Group sales have declined by 20% to 25% in the most recent three weeks of trading, ASOS said.

“Along with other businesses, we have been significantly impacted by the COVID-19 outbreak,” Nick Beighton, CEO, said in a company statement.

“Our first priority was to quickly put in place the necessary measures to ensure the health and wellbeing of our people. I have been extremely impressed with the pace of change and the flexibility our teams have shown in adopting these new ways of working. I’d like to thank them all for the way they have responded,” the CEO continued.

“Since then, we have been focused on keeping our business delivering for customers whilst implementing a series of actions to mitigate the sales impact we have been experiencing. At the same time we have been working to strengthen our financial position, including reaching agreement with our lenders to provide us with additional short-term financial flexibility,” the CEO added.

The CEO said: “The ASOS business model provides us with significant resilience and we are encouraged to have seen, across our markets, that where consumers are in lockdown, ASOS continues to be an important part of their lives. We have a global platform with the capacity and capability to drive our future growth as demand returns and against that backdrop we are looking to raise incremental equity capital to ensure we have sufficient resources to capitalise on the future whatever it may hold.”

Shares in ASOS plc (LON:ASC) were up on Wednesday, trading at +25.80% as of 12:34 BST.