Turkish fast fashion retailer Trendyol eyes ASOS

Turkish fast fashion retailer Trendyol, which has the backing of Chinese e-commerce giant Alibaba, is reported to be considering a £1 billion bid for ASOS.

Trendyol made an approach to ASOS in December with its potential offer that would have valued the business at between £10 and £12 a share. Shares in ASOS were up about 14% in early trading this morning at 400p.

No live talks are underway between the two parties so there is no requirement for them to make official declarations on the matter at this stage.

It is reported that Trendyol is working with Morgan Stanley on the mooted bid. The Turkish company has sales of £2.6 billion but is said to be loss-making. In 2021 it received backing of around £285 million from Alibaba, as well as around £1.2 billion from investors including SoftBank and the Qatar Investment Authority.

The news has emerged shortly after ASOS raised £75 million from a share placement and secured a new long-term £275 million financing facility,replacing a previous arrangement that was due to expire next year, to fund its turnaround programmed, called ‘Driving Change’.

Led by CEO José Antonio Ramos Calamonte, the Driving Change agenda shifts the focus of ASOS from short-term top-line growth to long-term profitability.

ASOS revealed sales dropped 7% to £1.84 billion in the six months to 28 February 2023 while pre-tax losses widened to £290.9 million (2022: £15. 9 million).

The loss was in large part down to a write-off of £128.2 million worth of stock and £49.4 million of non-cash property impairments due to closure costs relating to the reduction is size of its HQ and logistics footprint.



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