Asos boss Nick Robertson said its investment in cutting prices overseas will start paying off within six months as he attempts to stop the slowdown.
Robertson also dismissed the recent takeover rumours surrounding Asos as “pure speculation” and said he had not received any approaches for the business.
The etailer’s share price has plunged from more than 7000p in February to 2240p today following two profit warnings this year after its international sales were hit by currency fluctuation. This has led observers to suggest it is primed for a takeover.
Asos will reduce prices in key categories in countries such as Australia and Russia, where Robertson said its prices appear more than 30% more expensive.
The etailer revealed this morning that its investment in price would hit profits next year, which should come in level with this year.
Robertson said: “We can keep staring at international sales falling or we can do something about it.
“We’re going to see how we can stimulate sales and make it in the same class as our UK proposition. But you’ve got to put the investment up if you want to see the benefit,” he said.
The etailer plans to introduce zonal pricing around mid-November in time for its Christmas peak.
Asos reported rising sales but weaker margins in its fourth quarter to August 31. UK sales jumped 33%, EU sales rose 21%, US sales were flat but rest of the world sales fell 5%. Meanwhile, retail gross margins were down by about 640 basis points due to what Robertson referred to as a “triple whammy”.
Its higher margin international sales slowed which led to promotions, which damaged margin further. The fire at its Barnsley distribution centre shaved off another 200 basis points.
However, it was not all doom and gloom for Asos. It fared better than expected in China where it is set to make a £9m loss in its first year of trading and it is forecasting an improvement in its projected losses next year.
Robertson said it had “got to grips” on issues in China, such as getting stock there and labeling and said it would be “in better shape there next year”.