Asos is moving its stock listing to the London stock exchange’s main market in a long anticipated shift to attract more investors as demand for party dresses and formal wear fuels sales. The company is naming Patrick Kennedy, chairman of Bank of Ireland and former chief executive of Paddy Power, to its board as an independent director.
The UK online fashion retailer also said in a statement sales over Christmas were solid, helped by brands such as Topshop. After shocking the market with a profit warning in October, Asos held its full-year forecast steady and pointed to sales growth of as much as 15 per cent on Thursday.
Asos shares lost half their value in 2021 even as online shopping boomed. The retailer, like rivals Boohoo and H&M, has been hard hit by logistics problems that have made moving stock around the world more difficult since the pandemic and Brexit. Rising returns from customers, a big cost for online retailers, have also dented Asos’s performance.
After 20 years on the AIM market segment, Asos expects to switch its listing to the main market at the end of next month. The stock rose as much as 4.9 per cent in early trading.
The move is “another positive step for the share price,” RBC Europe. analyst Sherri Malek wrote in a note.
Asos shares have surged more than 11,000 per cent since the retailer first went public in October 2001, and its current market value of £2.3 billion (€2.8 billion) is among the biggest for companies listed on AIM. The stock closed at 2,259 pence on Wednesday, compared with its listing price of just 20 pence.
The move is a blow to AIM, which has worked for years to get past its reputation as a volatile venue where corporate blowups are commonplace. On the main market, Asos may be eligible to join the FTSE 250 Index.
Asos’s former chief executive Nick Beighton stepped down in October as part of a management shake-up and has yet to be replaced. Mat Dunn, chief operating officer, is currently overseeing the business.
It reiterated that it expects adjusted pretax earnings this fiscal year to range from £110 million to £140 million. – Bloomberg