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Excessive Returns Are Cutting Into Asos’ Profits — Will Its New Policy Help or Hurt Its Bottom Line?

Like many fashion retailers that sell online, Asos has a returns problem.
Not that the company would necessarily classify it as such (offering a generous returns policy boosts customer satisfaction, after all) but handling reverse logistics and unwanted product is an expensive proposition for any business, and online return rates for clothing and accessories can be as high as 40 percent. (Zalando, Europe’s largest online fashion retailer and one of Asos’ key competitors, said in the fall that it sees half of its merchandise sent back, and blamed its third-quarter losses largely on problems processing these returns.)
On Wednesday, Asos reported results for the first half of its fiscal year — a moment watched closely by investors after the company’s disappointing holiday performance sparked a sell-off that sunk its share price by more than 40 percent. Sales were up 14 percent over the same period last year, and the company’s forecasts for the full year remained unchanged, which was enough to boost its stock value by more than 7 percent during U.K. trading hours.
Still, it was hardly all good news: Asos’ pretax profit fell by 87 percent, and its retail gross margin sank 60 basis points. The problems, it said, were due

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Via:: https://footwearnews.com/2019/business/retail/asos-online-returns-policy-blacklist-1202770016/