Asos: flagging discretionary spend leaves fast fashion off the pace

The lesson: in a bear market, more bad news always lies ahead. Witness UK-listed Asos. What set the Asos downgrade apart was its product returns. The City had already halved pre-tax earnings estimates for Asos for the year to August to roughly £70mn. New chief executive José Antonio Ramos Calamonte halved those forecasts again. What is striking about the plight of Asos is how much its valuation has contracted in recent years. Asos gets lumped in with much dearer online retailers such as Germany's Zalando, which trades at 31 times earnings, and UK food delivery leader Ocado, which has no net earnings.

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