Online fashion retailer Asos has announced expectations of “significant improvement” in profitability for the first half of 2025, just ahead of its scheduled results release on 24th April. This announcement coincides with increased speculation surrounding a potential takeover, fueled by Danish billionaire Anders Holch Povlsen’s growing stake in the company.
Asos attributed its projected financial upturn to strong gross margin development, driven by reduced markdown activity, a higher proportion of full-price sales, and continued cost discipline. The company also reported a return to growth in its own-brand full-price sales, a result of its Test & React model, which now accounts for over 15 per cent of its own-brand sales and is experiencing further expansion.
This positive financial outlook comes as Asos shares witnessed a nearly 11 per cent surge in value, following the news of Anders Holch Povlsen, owner of the Danish fashion empire Bestseller, increasing his stake in Asos from 27 per cent to 28 per cent. Under UK regulations, reaching a 30 per cent stake would necessitate a formal takeover offer from Povlsen.
In October 2024, Asos sold Topshop and Topman to a joint venture led by Heartland, which represents Asos shareholder Anders Holch Povlsen and Bestseller. The sale, conducted through a competitive process, resulted in Heartland indirectly holding a 75 per cent stake in the joint venture. Asos Holdings Limited retains the remaining 25 per cent stake, granting the online retailer specific design and distribution rights for the brands in exchange for royalty fees, allowing Asos to continue selling Topshop and Topman online.
