Asos faces hit of up to £8m from cyber attack putting a dent in its turnaround efforts - This is Money
Fast fashion retailer Asos has reported sales were hit by up to £8 million following a cyber attack last month, affecting its ongoing turnaround efforts.
The cyber attack, which occurred nearly a month ago, prompted customers to receive notifications through the Asos mobile app with the message 'ASOS HACKED'. The hackers claimed to have compromised the Snowflake instance and threatened to leak data if not engaged with.
While customer names and contact details were accessed, Asos confirmed that no payment information or passwords were compromised. The retailer stated that authorities are still investigating the incident.
Financial Impact
The attack has shaved between £4 million and £8 million off Asos's sales in October, representing a 2-4% drop in group sales. This setback comes as the company was attempting to demonstrate progress on its turnaround plan to investors.
The impact would be 'temporary' and that Asos is pushing ahead with a revival plan.
Turnaround Progress
Despite the cyber incident, Asos reported positive developments in its financial recovery. The company swung back to profitability with £24.4 million profits for the year ending August 30, compared to losses of £281.6 million the previous year.
Sales returned to growth for the first time in four years during the final three months of this period. The retailer projects sales will grow by a low-single-digit range in the coming year, reversing from a 5 percent decline in the prior year.
Cybersecurity Measures
Addressing concerns about cybersecurity, Ramos emphasized that the company has always prioritized this area. 'We have always been investing in it,' he stated, adding that his main concern is protecting consumers and maintaining their confidence in the platform.
The attack follows similar incidents affecting other retailers, including Marks & Spencer, which experienced a hack last year leading to empty shelves and a six-week website outage. Harrods and Co-op were also victims in a recent wave of cybercrime targeting European businesses.
Market Response
Market analysts have noted positive signs in Asos's recovery. Mark Crouch from Etoro commented: 'Asos is beginning to look like a fashion retailer with a future again, rather than one permanently clearing up the mistakes of its past.'
The retailer highlighted that certain product ranges, including lace, satin, and sheer fabrics, are performing well. Asos continues to implement its turnaround strategy, which has involved reducing excess stock, limiting returns, and even banning some customers from its platform.
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