Chairman's Statement – ASOS plc
I said in my last statement that I was looking forward to seeing what the new management team with Chief Executive Officer Nick Beighton and Chief Financial Officer Helen Ashton, who took up their roles at the beginning of this financial year, would achieve, together with all the ASOS team. Twelve months later, the short answer to that is: a lot. We have maintained the momentum from the end of the 2015 financial year, and the business has continued to seize the opportunities ahead of it, again through continued investment and a strong customer ethos.
Our market has continued to grow this year and the pace at which ASOS needs to move to stay on top will only increase – a challenge we embrace. That requires an ever greater focus on what really helps us win – namely delivering what our customers want, to keep them engaged with our proposition, particularly in our key markets. To do that, we reached two major decisions that we firmly believe will aid us in this endeavour.
The first was to close our China operation in May, which wasn’t a decision we took lightly. It was difficult to lose so many talented and hard-working employees, but after three years we weren’t convinced that our operations in China were going to become profitable within a reasonable timeframe and we concluded that this investment could be deployed far more effectively elsewhere. The move has allowed us to concentrate on our priority territories – UK, continental Europe and the US – where there are many exciting opportunities and where we can better leverage our growing logistical footprint.
The second decision was to settle some long-running trademark infringement disputes. While we had successfully defended the claims against us so far, there was no certainty that we could continue to do so and this settlement provides absolute clarity for our business on a global basis and in key trading areas such as athleisure and fashion sportswear which we intend to pursue in the coming year.
These two significant decisions enabled us to sharpen our focus, and to continue to invest in our customer proposition. We’ve focused on positioning our international pricing to where it should be, and further improving our delivery options in our major markets. We continue to make them simpler, faster, more convenient and trackable, just as our customers expect them to be.
We’ve also invested significantly in technology, which underpins everything we do at ASOS. We’re making our systems more adaptable and better able to cope with our pace of change. It’s exciting to see the extent to which investment in the platform is beginning to pay off. It’s removed some issues that have constrained us and is really transforming the capabilities of the business.
We’ve also continued to invest in retail propositions and new categories, such as more gifting options, third-party branded specialist maternity range, and beauty and grooming.
ASOS is nothing without its people and everything we achieve is down to them. Their passion for the brand is incredible.
'ASOSers' are an amazing asset for the business and we never take them or their passion for granted. The Board and I offer all the team our heartfelt thanks, as always.
A CHANGE TO THE BOARD
Karen Jones, a Non-Executive Director, stood down at our last AGM. Karen had been with us for six years and was Chair of the Remuneration Committee. She steered us through some significant remuneration changes, particularly new share schemes, and, on behalf of the entire Board, I’d like to thank her for the entrepreneurial flair and insights she brought to ASOS.
The Board has again decided not to declare a dividend. We generate a high return on invested capital and currently have no shortage of places to invest our surplus cash to improve our customer proposition. We believe the right thing to do is to keep growing the business by focusing on our customers.
THE YEAR AHEAD
In our market, standing still is not an option. Everyone at ASOS knows that to stay ahead we need to make life even harder for our competitors and better for our customers. They will only engage with and commit to us if we commit to them. That’s very exciting and must continue. If we’re to become the world’s no.1 fashion destination for 20-somethings, as we fully intend to, our products need to be at the forefront of fashion, the price needs to be right for the market and we have to make it as convenient as possible for people to shop with us.
It’s been a good year, and the hard work has paid off, but we’ve still got plenty to do. We’re all up for the challenge.