Business is booming.

Asos blames ‘detrimental’ virtual meetings for impacting performance

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The online store’s sales surged, profits tripled, and popularity soared as people clicked away on their shopping carts from home. 

Then reality hit. Supply chain struggles, a share price slump, and financial woes became all too real—and now, as the retailer tries to turn its business around, it’s requiring people to show up in the office more. 

Asos, which runs a sprawling retail store online, has warned its staff that virtual meetings are having a “detrimental” impact on its performance, causing a “strain” on the entire company, the Times of London reported, citing an internal correspondence on Wednesday. 

The U.K.-based company, which also owned Topshop, now insists that its staff adhere to its return-to-work policy of at least three days a week in the office. That way, people can be involved face-to-face in projects, brainstorming, and other commercial meetings. 

Asos added that there was a “very real need” for people to touch and feel clothes, which was “impossible virtually.”

Many companies that offered flexibility to employees during the pandemic have since walked back on their policies to lure people back into the office. From tech to banking, every industry has seen the trend. Take Zoom, the video conferencing platform—it ordered its staff back to the office twice a week last year.  

In Asos’s case, the memo clamping down on employees waffling their way through flexible work policies comes at a crucial time as the company tries to overhaul its business amid deep losses

In late 2020, Asos’s then-CEO Nick Beighton told The Evening Standard that working from home was “not better” than the in-office setting as you “simply can’t replicate the camaraderie, creativity and energy you get from being together.” It’s unclear how many Asos employees have failed to meet its three-day minimum office attendance rule. 

Representatives at Asos didn’t didn’t immediately return Fortune’s request for comment.

Turning the woes around 

Once a stock market favorite, the London-listed company’s shares have become the most-shorted stocks in the U.K. as investors think it might fall further. Its shares have shed 10% of their value in the last year and 88% over the last five years. 

Asos reported an 18% decline in sales and a 37% higher pre-tax loss of £120 million ($150 million) for the six months to Mar. 3, 2024 compared to a year earlier. Competition has also heated up with cheaper retailers like Shein and Temu flooding the market, adding pressure on Asos to fix its business.

Under CEO Jose Antonio Ramos Calamonte, the company has been trying various measures to bring its business back to good health. Asos announced a debt restructuring deal from shareholders worth £80 million ($100 million) in May, in addition to the £275 million ($349 million) it borrowed from lender Bantry Bay Capital. 

On the operational side, Calamonte has also slashed capacity and unloaded Asos’s inventory by offering heavy discounts and curbed costs.

When announcing half-year results in April, Asos said it was confident it could turn its fate around in the next fiscal year as all its efforts started reaping the rewards. 

“Asos is becoming a faster and more agile business,” Calamonte said in a statement at the time.

Read More: Asos blames ‘detrimental’ virtual meetings for impacting performance

2024-06-20 15:48:24

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