LONDON -Britain's ASOS, the one-time poster child for the shift to online fashion, vowed on Wednesday to overhaul its business model after the economic crunch combined with a string of operational problems to hammer its profits.

With its shares down 80% this year, new CEO José Antonio Ramos Calamonte said the firm would address unsatisfactory returns from its international operations, particularly from the United States.

He would also improve ASOS's "inefficient" supply chain, find a way to re-engage its 20-something customers, better leverage its data, cut costs and refresh the company's culture.

"Over the next 12 months I'll be focusing on simplifying the business and making it more resilient and flexible," Ramos Calamonte told Reuters.

"We want to be able to deliver more relevant stock and faster to consumers."

Shares in ASOS were up 11% at 0903 GMT, as investors welcomed the shift and a new deal with lenders.

ASOS and rival Boohoo grew rapidly as young customers around the world snapped up their fast fashions, and demand surged again during the coronavirus pandemic when high street rivals were closed.

But major supply chain issues, increased competition and the sharp downturn in the economy have badly affected its business model. The perennial problem of managing customer returns has also weighed on the business.

Boohoo warned on the outlook last month.

ASOS made adjusted pretax profit of 22 million pounds ($24.9 million) in the year to Aug. 31, 2022, in line with guidance that was lowered last month and down from the pandemic boosted 193.6 million pounds made in 2020-21.

It said it would report a loss in the first half as it slashes prices to clear stock, requiring a non-cash write-off of up to 130 million pounds.

In the second half, ASOS will begin to operate with lower stock levels due to the lead time on orders and deliveries. It would also benefit from reduced freight rates and cost cuts.

ASOS did not give profit guidance for the full year. Prior to the update, analysts on average were forecasting an adjusted pretax profit of 61 million pounds.

It said while trading was volatile, September had showed a slight improvement relative to August.

Ramos Calamonte said that with cash and committed facilities of more than 650 million pounds at year end, ASOS had ample room to manoeuvre and did not need another equity raise.

He said he was not concerned by the threat of a takeover bid and did not obsess over the share price.

"I'm pretty sure that if we create value, sooner or later the share price will go back to a decent region," he said.

  - Reuters