Asos CEO Nick Beighton has outlined plans to step up the etailer’s investment drive, as well as introducing new initiatives to cut plastic waste and improve payment methods to brands.
Speaking after disclosing the etailer’s results for the six months to 28 February, Beighton said its capital expenditure for the full year is expected to reach around £230-250m.
This will feed into technology and artificial intelligence functions as well as warehousing and back office systems.
“We are stepping on the gas in all of those,” he affirmed. “We are putting high investment and a high level of change though the organisation.”
Among these changes, Asos plans to open the doors to its new US warehouse fulfilment centre in July, three months earlier than planned.
The $40m (£28m) facility, located in Union City near Atlanta, was originally slated to open in October.
Meanwhile, Beighton said the business is mulling several initiatives to cut plastic waste, including a “bag for life” for Asos Premier customers, in which shoppers could potentially send back bags after deliveries to reuse for future orders.
It is also considering using different types of fabrics with bio-origins, rather than plastic, and is looking into how to create swimwear and beachwear ranges from recycled plastic.
Beighton said: “There are no specific targets to share [on plastics] but this is something deeply personal to me, that is shared by the Asos business and increasingly by our customers.
“We have a couple of in-built problems – last year more than 50 million orders shipped, largely in plastic carrier bags, so the first piece is how can we improve the recyclability content of those. We have a whole working group led by the Asos team looking at how to improve what we do on this.”
Elsewhere, Beighton vowed to continue improving its payment methods to its brands, after the results showed that payments to its trade customers slowed during the period ahead of the planned introduction of a new finance system.
He admitted the “stats were around 57 days’ payment, but only 32% of payments were being met on time”: “We had a bumpy finance implementation between September and December. Regrettably that was at peak time for our suppliers’ cash flow. We were not getting payments out anywhere near like what we think is acceptable.
“We have now improved our payment methods substantially since the year-end and we will continue to improve that. Notwithstanding that, Asos has some of best payment terms in the retail industry. We need to do more work on this to ensure our payments are smooth for our trade and non-trade partners.”
Beighton reiterated: “I don’t believe in stretching working capital from the people helping you build a business, its counterintuitive and goes against all the fashion integrity programmes and work we do.”
Last month Asos co-hosted an event at the House of Lords with Baroness Lola Young to identify and address modern slavery risks in the clothing sector. Executives from around 40 UK brands gathered to share their views and learnings on the matter.
Beighton said the group has agreed to reconvene in six months to share their progress with Young, adding: “Several chief executives at some of our branded partners showed commitment to make a change.”
Asos will also host a conference in China “in the foreseeable future”, after running similar events to address the challenges of modern slavery in Mauritius in February and in Turkey last month.
The online retailer is currently in the early stages of seeking a new chief financial officer as Helen Ashton prepares to step down from the role in the summer.
Beighton said the business made 700 hires in the six-month period.