Business

Asos chief Nick Beighton resigns as it warns over supply chain pressures

Nick Beighton, the chief executive of Asos, is to step down with immediate effect as the online fashion retailer warned that supply chain problems and rising costs will affect its profits.

Asos said Beighton and the board had agreed it was “the right time” for him to go. It said after the departure of Beighton, who has been at the company for 12 years with the past six in the role of chief executive, it will continue to focus on international growth.

“Asos’s management and board have spent considerable time over recent months developing and validating a clear strategic plan to accelerate international growth, building on Asos’s undoubted strength in the UK,” said the Asos chairman, Adam Crozier, who is to stand down next month to take over as chairman at BT.

“Key to that is ensuring that we have the right leadership in place for the next phase, and the changes we are announcing today are designed to ensure we deliver against our clear strategic intent.”

The company, which has benefited from the online shopping boom during the Covid pandemic with revenues up by a fifth and profits rising by more than a third in the year to end of August, warned that the global supply chain shortage is affecting its business.

“Supply chain challenges loom relatively large,” said the Asos chief financial officer, Mat Dunn, who will lead the business on a day-to-day basis until Beighton’s successor is found. “There is anticipation of extended supply lines and pressure on some brand partners means lower availability than we would want. We are expecting the situation to improve [but] peak [pressure] on global supply chain capacity is in the run-up to Christmas, early January through to lunar new year.”

Asos said there would be “notable cost headwinds” including inbound freight costs, labour cost inflation, outbound delivery costs and Brexit duty.

The company, which reported adjusted pretax profits up 36% to £193.6m in the year to the end of August, said it expects profits to fall between £110m and £140m for its next financial year. This is below analysts’ expectations of £186m.

Shares plunged more than 15% in early trading on Monday and have fallen nearly 50% this year.

Beighton said: “I have enjoyed every moment of my 12 years at Asos. When I joined, there were fewer than 200 people and we had annual sales of around £220m. I leave a business reporting turnover of almost £4bn, with more than 3,000 fantastic Asos-ers delivering for 26 million customers in 200 markets around the world.”

Asos said that revenues grew by 22% year on year to £3.9bn, driven by “exceptional” growth of 36% in the UK. In the US revenues grew 21%, Europe rose by 15% while across the rest of the world revenue growth was just 6%.

The company said its performance across the rest of the world was particularly poor because of how long deliveries take: for example, in Australia customers have to wait 30 days for an order to arrive.

Dunn said that the company aims to double the size of its US and European business in the medium term. “We want to evolve from a UK-centric brand,” he said.

“Asos seems to have found it hard to keep up with the fast fashion movement in recent years, coming in for criticism for not being able to turn around new product designs quickly, experiencing warehouse problems and poor stock availability,” Russ Mould, the investment director at AJ Bell, said. “Customers have so much choice with where they buy clothes and competition continues to grow. Asos will need to do something extra to make it stand out from the crowd.”

Earlier this year Asos acquired the Topshop and Miss Selfridge brands for £330m, but Dunn said not to expect a flurry of new deals.

“We have the strength and flexibility on our balance sheet and we have the strategic option and if things meet our criteria we will look at them,” he said. “I anticipate we will look at lots of things but not do very many [deals].”

Business

NAFDAC orders recall of Dove Beauty Cream Bar soap

The National Agency for Food and Drug Administration and Control has ordered the recall of Dove Beauty Cream Bar Soap (100g) with batch number 81832M 08, produced in Germany.

In a statement released on its X handle, the agency said the recall was due to the presence of a chemical impurity.
According to NAFDAC, the product violates the Cosmetic Products Regulation by containing Butylphenyl Methylpropional, also known as Lilial, a chemical associated with serious health risks.
The agency explained that BMHCA has been banned in cosmetic products because it can harm the reproductive system and potentially affect the health of unborn children.

It added that the chemical has been linked to skin sensitisation, triggering allergic reactions in some users.

The statement reads;

“The National Agency for Food and Drug Administration and Control (NAFDAC) is alerting the public about the recall of Dove Beauty Cream Bar Soap (100g) with batch number 81832M 08, produced in Germany, due to chemical impurity. The product does not comply with the Cosmetic Products Regulation, as it contains Butylphenyl Methylpropional (BMHCA), which is prohibited due to its risks of reproductive harm, danger to unborn children, and potential for causing skin sensitization. Several regulatory authorities in the EU have already banned its marketing.”

Other Dove cosmetic products recalled/banned in other countries due to the presence of BMHCA are Derma Spa Goodness, Men Care, Men Care+ Sensitive Shield, Natural Touch, Nourishing Body Care Light Hydro, Pampering Body Lotion, Go Fresh, Talco con Crema, Go fresh Pera, Extra Fresh, Goodness3 Skincare Ritual, invisible dry antiperspirant spray + Go Fresh Revitalize nourishing shower gel, Caring hand wash and invisible dry.

The agency said the soaps are not on its database. NAFDAC urged the public to be cautious and vigilant within the supply chain to avoid the importation, distribution, sale and use of the products.

“Importation of soaps is prohibited in Nigeria as per the restricted and import prohibition list. Beyond the import restrictions soaps and cosmetics are parts of the items ineligible for foreign exchange to import in Nigeria. These products are also not available in the NAFDAC database. Importers, distributors, retailers and consumers are advised to exercise caution and vigilance within the supply chain to avoid the importation, distribution, sale and use of the above-mentioned products. Members of the public in possession of the product should discontinue the sale or use and submit stock to the nearest NAFDAC office.”

NAFDAC also urged health experts to report adverse events experienced with the use of regulated products to its nearest office.

The statement added

“Healthcare professionals and consumers are encouraged to report adverse events experienced with the use of regulated products to the nearest NAFDAC office, via pharmacovigilance@nafdac.gov.ng, E-reporting platforms available at www.nafdac.gov.ng or via the Med-safety application for download on android and IOS stores.”

Business

FG denies report of increasing VAT to 10% despite hardship in Nigeria

The Finance Minister and Coordinating Minister of the Economy, Wale Edun, has denied a report of a potential hike in the Value-Added Tax (VAT) rate from 7.5% to 10%.

In a statement released Monday, Edun clarified that the VAT rate is still firmly set at 7.5%, as outlined in Nigeria’s tax laws.

“The current VAT rate is 7.5% and this is what the government is charging on a spectrum of goods and services to which the tax is applicable. Therefore, neither the Federal Government nor any of its agencies will act contrary to what our laws stipulate,” Edun affirmed.

He elaborated on the need for a balanced tax system, emphasizing that Nigeria’s tax framework operates on three key components: tax policy, tax law, and tax administration.

“The tax system stands on a tripod, namely tax policy, tax laws, and tax administration. All the three must combine well to give us a sound system that gives vitality to the fiscal position of the government,” the minister explained.

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Edun addressed concerns from the public about policies that might seem burdensome, assuring that fiscal measures are designed to foster sustainable growth and reduce poverty, not the opposite.

“Our focus as a government is to use fiscal policy in a manner that promotes and enhances strong and sustainable economic growth, reduces poverty as well as makes businesses flourish,” Edun stated.

In response to media reports suggesting the government is imposing undue hardship on citizens, Edun refuted such claims.

Edun also pointed out recent government actions aimed at reducing the financial strain on Nigerians, particularly by eliminating import duties on key food items like rice, wheat, and beans.

“The imputation in some media reports on the issue of VAT and the opinion articles that have sprouted from them seem to wrongly convey the impression that the government is out to make life difficult for Nigerians. That is not correct. If anything, the Federal Government has, through its policies, demonstrated that it is committed to creating a congenial environment for businesses to thrive.

“In fact, it is on record that the Federal Government, as part of efforts to bring relief to Nigerians and businesses, recently ordered the stoppage of import duties, tariffs, and taxes on rice, wheat, beans, and other food items,” Edun noted.

Edun reiterated that the VAT rate remains at 7.5% and will continue to apply to all eligible goods and services.

“For emphasis, as of today, VAT remains 7.5% and that is what will be charged on all the goods and services that are VAT-able,” he concluded.

Business

FG imposes levy on transactions above N10,000 on Opay, others

The federal government has imposed a N50 deduction for every electronic money transfer (EMTL) of N10,000 and above, affecting customers of fintech platforms such as Opay and Moniepoint.

The deduction, which is in line with the Federal Inland Revenue Service (FIRS) regulations, is set to take effect from September 9, 2024.

The announcement was made by the fintech companies through notifications to their customers.

In a statement, Opay informed its customers, “Dear valued customers, please be informed that starting September 9, 2024, a one-time fee of N50 will be applied for electronic transfer of N10,000 and above paid into your personal or business account in compliance with the Federal Inland Revenue Service regulations.”

The company clarified that these deductions are part of the government’s requirements and not a revenue stream for fintech companies. “It is important to note that OPay does not benefit from these charges in any way as it is directed entirely to the Federal Government,” the statement added.

Similarly, Moniepoint, another major fintech platform, issued a brief notice, stating: “A N50 fee would be charged on inflows you receive of N10,000 and above from Monday, September 9, 2024. Your BRM is available to answer questions you might have.”