By Daily,Editor

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Asos shares fell sharply after it warned ‘subdued’ demand has hit profits.

Bosses insisted the online fashion retailer has entered the ‘final stage’ of a turnaround plan launched last year having ‘permanently’ slashed costs and significantly improved profitability.

But shares fell 4.8 per cent, or 14p, to 279p and are down almost 40 per cent in the past year and more than 90 per cent since their Covid-19 pandemic peak.

Online fashion retailers have struggled since then, weighed down by waning demand, growing costs and greater competition from the likes of Chinese industry giant Shein.

Asos has been ridding itself of excess stock and reducing business costs, while clamping down on excessive returns – including steps to ban customers from its platform.

But total sales for the year will come in below analyst expectations, with Asos citing a ‘focus on higher quality sales against a soft consumer backdrop’.

And it expects full-year earnings to come at the ‘lower end’ of a £130million to £150million forecast range.

Nevertheless, Asos says it has entered the third and final step of its turnaround plan.

Chris Beauchamp, chief market analyst at IG, said: ‘It’s clear from this update that Asos’s long journey out of its post-Covid nightmare is starting to bear fruit.’