Yorkshire-based Asos raises £75m from share placement as part of turnaround plan

In an update to the London Stock exchange on Friday morning, the company announced the successful completion of a placing of new ordinary shares in the capital of the company which had raised approximately £75m.

The company said the move was part of its ongoing strategy “to return the business to sustainable profitability and cash generation” for the second half of 2023 and beyond.

It follows the company announcing on Thursday that it had also entered into a £275m financing facility arrangement with specialist lender Bantry Bay Capital Limited through to April 2026, with an option to extend.

In addition to the £75m share placement to raise equity, a separate £5m retail offer for new ordinary shares has been launched.

The Friday update added: “A key pillar of the Driving Change agenda is a robust and flexible balance sheet.

"This, in conjunction with the new financing arrangements detailed in the announcement made on May 25, provides financial flexibility and creates a stable base for ASOS' continued execution of its strategy and future return to growth.”

Earlier this month, Jose Antonio Ramos Calamonte, chief executive of Asos, said he was confident of returning to “sustainable profit” in the second half of its year.

“I am pleased with the strategic and rapid operational progress the business has made in the first half of the financial year, against some very challenging trading conditions.”

He added: “While some of these changes have impacted short-term sales growth, there are many causes for optimism as we progress through the second half of the year.”

“I am very confident of our return to sustainable profit and cash generation in the second half of the year and beyond.”

The firm recently disclosed further details of its ongoing turnaround plans and aims to drive more than £300 million of profit and cost savings measures this financial year.

It said in January it would shut three storage warehouses in the UK, Europe and the US, while it is also trimming some of its office space, but not closing sites.

Asos is also axing 35 unprofitable brands.

Asos has also said that it is cutting jobs to save about 10 per cent in staff costs, with about 100 jobs going.

The firm recently said it has pushed through low-single digit percentage price hikes to help offset inflation pressures, while it has also increased delivery prices, introduced or increased minimum order values for free delivery across its global operations and hiked subscription costs.