In a move that has sparked outrage among employees and investors alike, online fashion retailer Asos has awarded its CEO José Antonio Ramos Calamonte a staggering £300,000 pay rise despite the company’s ongoing financial struggles. The controversial decision comes amidst job cuts, widening losses, and a share price that has plummeted by 90% from its peak in 2021.
Rewarding “Spectacular Failure”?
According to Asos’s annual report, Calamonte’s total pay jumped from £814,000 to £1.17 million in 2024, representing a 44% increase. This generous pay hike has been met with fierce criticism, with unions accusing the company of rewarding “spectacular failure.”
“It’s nauseating to see fat cat Asos bosses trousering a fortune while the share price tanks and workers lose their jobs. It’s staggering somebody can be so well rewarded for such spectacular failure.”
Andy Prendergast, GMB Union National Secretary
The timing of the CEO’s pay rise has raised eyebrows, as it coincides with a period of significant financial turmoil for the once-thriving online retailer. Asos reported a pre-tax loss of £379.3 million for the year ending September 1, 2024, up from £296.7 million the previous year. Sales also slumped by 12% during the same period.
Job Cuts and Union Battles
To make matters worse, Asos has reduced its workforce by approximately 300 employees over the past year, bringing its total headcount to just over 3,000. In September, the company launched a consultation with workers at its London headquarters regarding a further 200 job cuts. Asos has also faced battles with some workers over conditions and union recognition.
Falling Behind the Competition
Once an investor darling during the height of the pandemic, Asos has struggled to maintain its footing in the fast-paced world of online fashion. The company’s share price has crashed as brick-and-mortar stores have reopened, benefiting rivals like Zara and H&M. Moreover, nimbler competitors, particularly China’s Shein, have muscled in on Asos’s online territory.
In an attempt to keep up with the competition, Asos has tried to institute a quicker turnaround from design to manufacture. However, this strategy shift towards an ultra-fast-fashion business model has drawn criticism for its potential environmental toll, as unwanted clothes are more likely to end up as waste.
Calls for a Sale
As Asos continues to struggle, some analysts have suggested that the company should consider putting itself up for sale. The stark contrast between Asos’s fortunes and those of its Chinese rival Shein has not gone unnoticed. Shein, valued at more than £50 billion last year, is reportedly considering a stock market listing in London after being rebuffed by regulators in New York.
The rise in Calamonte’s pay, driven by £376,000 in bonuses, has only added fuel to the fire. It would now take the median Asos worker 20 years to earn what the CEO makes in a single year—an improvement from the 2019-2020 financial year when the ratio reached a staggering 38 under former CEO Nick Beighton.
“I don’t think by any stretch of imagination things have got significantly better than where they were six months ago.”
José Antonio Ramos Calamonte, Asos CEO
As Asos navigates these turbulent waters, the company faces mounting pressure to justify its executive pay decisions and chart a course towards profitability. With competition in the fast-fashion sector showing no signs of slowing down, Asos will need to act swiftly and decisively to regain the trust of its employees, investors, and customers alike. The question remains: Will the online fashion pioneer be able to turn the tide, or is it destined to become another casualty of the rapidly evolving retail landscape?
