It puts cash first, a logical measure in the terrible inflationary context
Cash rules for the almost new CEO of ASOS. On Tuesday, the fast-fashion retailer changed the bonus targets of Spaniard José Antonio Ramos Calamonte for next year. The part of the pay of up to 1.3 million euros linked to revenue growth will drop from 30% to 15%. Meanwhile, the part linked to cash flow rises to 35%, and cost cuts will also be rewarded.
The brazen move makes sense given the dire context. With inflation soaring, consumers have less money for disposable fashion. ASOS announced annual losses in October, and needs to cut costs, and debt, which in 2023 could hit $280 million, nearly double that in 2021. The hope is that cutting staff and costs can help it avoid further capital increases. But that may mean lower prices or fewer customers in the future. After the years of rapid growth are over, ASOS may look even more vulnerable to a buyout.
