Online fashion giant ASOS is turning to artificial intelligence to style its way out of a sales downturn, revealing a 12% plunge in revenue for the year ending August 31.
A Year of Challenging Figures
The retailer laid bare the scale of its challenges, reporting that sales had fallen by 12% in the year to August 31. There was a sliver of positive financial news, however, as the company managed to narrow its pre-tax losses significantly. Losses were reduced to £281.6 million, a notable improvement from the £379.3 million loss recorded the previous year.
The Tech-Driven Fightback
In response to the slide, ASOS has pledged a new era of customer re-engagement, aiming to win over increasingly cautious consumers. A central pillar of this strategy is the trial of a new feature called Styled for You.
This tool uses artificial intelligence to suggest complete outfits to shoppers. A spokesperson for ASOS explained the mechanism, stating, "Trained on our database of 100,000-plus expertly curated studio outfits, our AI model can serve customers with curated outfit suggestions based around individual products."
Alongside the AI stylist, the group has launched a new loyalty programme named Asos.World, further underscoring its focus on retaining and rewarding its customer base.
Investor Jitters and Future Forecasts
Despite these initiatives, investor confidence took a hit. Shares in the firm tumbled 8% in afternoon trading following the announcement, driven by profit forecasts for the 2025-26 financial year that fell short of market expectations.
The company is guiding for underlying earnings of between £150 million and £180 million. The mid-point of this range, £165 million, is below the £173 million most analysts had anticipated. Nevertheless, ASOS stated that sales are expected to show an "improving trajectory throughout the financial year."
Chief executive Jose Antonio Ramos Calamonte outlined the company's priority: "Our priority for 2025-26 is to deepen our relationships with customers and make Asos not just a place to shop, but a destination for inspiration and style."
Commenting on the strategy, Dan Coatsworth, head of markets at AJ Bell, said, "Asos is trying through a combination of loyalty schemes and technology, using AI to generate outfit inspiration, to drive engagement with its target demographic." He added a note of caution, pointing out that the company is still "facing increased competition and a downbeat consumer backdrop."
