Asos Plc suffered a double-digit decline in sales in the first half as the fashion retailer was forced to heavily discount clothes to clear a buildup of last season’s unsold stock. 

The troubled online clothing retailer said Tuesday that sales fell 18% in the six months to March 3, which was broadly in line with guidance. 

Asos has been struggling to revive its fortunes since the pandemic when a boom in online shopping receded and consumers prioritized their spending on essentials like food and energy rather than fashion.

Shares of Asos rose 6% in early trading in London. The company’s share price has more than halved in the past year. 

Chief Executive Officer Jose Antonio Ramos Calamonte, who has had the top job since June 2022, has previously said Asos needs to focus its efforts on getting the most relevant fashions to customers faster. Measures he has taken include mothballing its distribution center in Lichfield, reducing its capacity and cutting costs. 

In May, Asos unveiled a debt restructuring deal as part of its turnaround, raising £80 million ($101 million) from shareholders, including Danish fashion group Bestseller and US hedge fund Camelot Capital Partners. It also borrowed £275 million from specialist lender Bantry Bay Capital.

The company stuck to its outlook for the current fiscal year and still expects a sales decline of between 5% and 15% this year with positive adjusted earnings before interest, taxes, deprecation and amortization. 

Asos is delivering on its strategic ambitions and is on track to achieve profitable growth, said Matthew Abraham, an analyst at Berenberg. “We believe that Asos’s focus on the niche, fashion-conscious 20-plus market is a key competitive advantage,” he added.

Asos is going through an overhaul which should ultimately drive improvements to performance, according to Richard Chamberlain at RBC Europe. “Asos’s competitive advantage on service has narrowed as it makes adjustments for the sake of profitability, and also as omni-channel retailers have closed the gap,” he said. “This has partly reduced our confidence in the group’s long-term outlook.”

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