ASOS said to be considering head office job cuts

According to The Sunday Times, the company is consulting on about 100 redundancies at its London head office, with most of the roles under threat understood to be in the marketing department.

In its interim results back in April, the retailer posted an 87% slump in pre-tax profit, dented by heavy discounting and issues with website traffic. In December last year, meanwhile, the group's shares tanked as it warned on profits after a poor November.

Commenting on the Times report, which pinned the blame for the redundancies on slowing sales and a botched warehouse opening in America, Stifel said: "We, on the other hand, think that the company is struggling to recover the lost market share in this current retail environment, without a distinctive own label and strong social media marketing."

It said the news comes at a time when marketing efforts on social media have been quite noticeable, "hence we believe the cuts might be focused on traditional marketing channel positions".

Mirabaud also said the cuts would most likely be focused on traditional marketing channels, "while the company pivots to making significant efforts on social media".

"So rebalancing in this way would be a positive step long term," it said.

"ASOS is certainly in a transition period; investing for growth, making changes to own label products, multiple changes to the website, revamped social media strategy, and customer interaction initiatives. Stabilising sales growth, potential recovery in Europe and strong growth in the US could all act as positive catalysts against low expectations. Solid top-line growth could be underpinned by improving customer acquisition.

"However, some argue that the risk is this comes at a higher cost of acquisition with higher promotions are still being used as a recruitment tool. Even if this was the case if a digital business can see accelerating top-line growth this would be the most important dynamic - then you could slow the tap of promotions and drive incremental profitability thereafter."

At 1255 BST, the shares were down 2 2% at 2,554p.