Topshop is to return to the high street with outlets in other retailers’ stores, its owner, Asos, has announced as it played down the impact of rapidly changing tariffs and tax rules on its US sales.
The UK online fashion specialist said it had signed deals to set up Topshop branded areas with a number of retail partners and was looking for more, but the first step to a more independent image for the brand would be the relaunch of a stand-alone Topshop.com website later this year.
No stand-alone stores are planned at present but the company said it had not ruled that out longer term.
“The time has come to become much more present with consumers in the UK and globally, said José Antonio Ramos Calamonte,Asoschief executive.
His comments came as the company revealed sales continued to fall rapidly – down 13% to £1.3bn in the six months to 2 March, while pre-tax losses narrowed to £241.5m from £270m a year before – amid hefty competition from rivals such as China’s Shein and Temu.
Calamonte said the company was focusing on “delivering value” for its customers in a “volatile environment” amid rapidly changing plans for tariffs and tax breaks on imported goods in the US.
Sales in the US dived by 30%, which the company attributed to “market conditions” as well as action to reduce unprofitable sales. In the UK, sales fell 6% as the number of website visits and orders dropped, but full-price own brand sales rose 9%.
Calamonte said Asos would probably benefit if, as expected, the UKscrapped or reduced a tax breakfor products costing less than £135 sent direct to consumers from abroad, which has driven the growth of Shein and Temu. However, he added: “We want to win by offering consumers the best possible product and that’s where we put all our energy.”
The CEO said Asos, which sells goods worth about £300m a year in the US, had “the flexibility to react to whatever comes” on tariffs, as its products were made in a number of countries including Turkey, Morocco, eastern Europe and even the UK, as well as China and the far east.
“I feel confident we are well prepared to react to this challenge,” he said, adding that the group was “monitoring the situation very closely as it is changing quite a lot”.
At present, Asos products are not subject to import tariffs in the US because they benefit from a tax break for items worth less than $800 sent direct to consumers from abroad. That loophole will be closed for Chinese-made products from next week.
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Calamonte said only 5% of the group’s sales in the US were generated by products sourced in China. These were likely to face higher tariffs when rules changed, but that would not necessarily mean higher prices for US shoppers, he said. “We adapt to the market we will not push prices we will follow the market.”
The Asos boss said there were no signs of Chinese-made products being dumped in the UK or Europe but Asos was “not fighting the battle of being the cheapest in the market and we are not going to change that now”. He added that the UK online fashion market could not get any more competitive that it already was.
“Some companies are operating cheaper than us and we are still finding green shoots,” Calamonte said.