City comment: Nick Beighton was a great CEO at Asos but he leaves on a low

·2-min read
Asos promised to reach net zero by 2030 (Tim Goode/PA) (PA Wire)
Asos promised to reach net zero by 2030 (Tim Goode/PA) (PA Wire)

Nick Beighton has done a great job at Asos but is leaving on a bum note.

The online fashion retailer surprised the market today by saying its chief executive was stepping down with immediate effect. A search for his successor is only just beginning.

The update has left analysts scratching their heads. There was no suggestion Beighton was on the way out - now he’s gone overnight, albeit hanging around until the end of the year to help with handover.

The company is framing the exit as all about the strategy: Asos has announced an ambitious new growth target that requires a CEO who is there for the long haul. Beighton can’t commit.

The timing is unfortunate. Wind the clock back 12 months and Asos was riding high, boosted by a pandemic-fuelled buying spree driven by bored millennials and Gen Z-ers. The boom has since faded and so has Asos’s share price. The stock is down more than 50% since its peak at the start of this year. New headwinds are emerging around supply chain problems. Competition is only heating up as more and more retailers up their online game.

Asos’s shares took another leg lower today, in part because of Beighton’s surprise departure but also because of disappointingly weak guidance on sales growth next year.

Beighton had big shoes to fill when he took over from Asos founder Nick Robertson in 2015. He’s filled them by taking the retailer international and more than tripling sales to just shy of £4 billion.

Now the board wants to reach sales of £7 billion within the next four years — an even bigger ask that carries plenty of execution risk. Expect Asos’s share price to be jittery until the board can prove they’ve lined up a superstar replacement.

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