Online retailer Asos warns of hard-Brexit hit

More than a third of British retailers do not know or “really understand” what their businesses need to do to prepare for the end of the Brexit transition period, according to an informal poll. File picture: PA

Online fashion retailer Asos has warned it could face a £25m (€28m) hit from tariffs in the event of a no-deal Brexit, even as it gets a boost from more consumers shopping from home during the pandemic.

Asos disclosed the potential Brexit costs as it reported strong gains in sales and profit following a surge in online clothes shopping during the pandemic. Investors were worried by the retailer’s cautious outlook, however, and its shares fell as much as 12%.

The tariff cost could possibly be higher as it does not include the expense of managing additional paperwork if Britain fails to secure a timely trade agreement, the London-based company said. 

Asos has not decided whether extra costs from a potential Brexit no-deal would be passed on to customers.

Asos reported that profit more than quadrupled in the latest year, to £142.1m, as revenue jumped 19%. Gains were fuelled by increased orders, lower capital expenditure, and fewer returns, reducing costs.

The retailer expects underlying profit to increase in the current year but remains cautious because of the weaker economic prospects for its core customer base of young shoppers.

More than a third of British retailers do not know or “really understand” what their businesses need to do to prepare for the end of the Brexit transition period, according to an informal poll. 

The survey was conducted among attendees of a Brexit preparation webinar hosted by Britain’s Department for Business, Energy, and Industrial Strategy.

• Bloomberg