ASOS’s inventory strategy during the pandemic was key to navigating seismic shifts in demand while also managing store shutdowns, high tariffs, and changing customer preferences.
In this article, I will show you how ASOS’s inventory strategy protected cash flow, suppliers, and future growth.
Key Nuggets:
- ASOS supply chain reshaped its inventory operations during the pandemic to match the sudden shift in customer demand, while protecting cash and capacity.
- Although it was a turbulent period, the company managed to pay suppliers in full to keep them afloat and loyal.
- Post-pandemic, ASOS cleared old stock, rebuilt its planning model, and reduced inventory levels by about a third as trading conditions normalised.
- African supply chains can apply some of the lessons from ASOS’s inventory strategy by rebalancing categories more quickly, treating suppliers as partners, and building simple, flexible planning habits.
BTS: ASOS Inventory Strategy During The Pandemic
When COVID-19 hit, the fashion world was turned upside down. Shoppers stopped attending events, going to offices, and attending parties. Naturally, the new behaviour shifted customer preferences, leading to a drop in the usual demand for dresses, suits, and occasionwear.
But it wasn’t all bad news. At the same time, comfort wear, sportswear, and self-care items moved to the front of the queue, which left companies like ASOS with a lot of inventory that looked nothing like what customers wanted to spend their money on.
On top of that, ASOS was faced with significant pressure on the cost side. Brexit introduced new duties and friction between the UK and the EU.
By late 2021, ASOS CFO warned of “notable cost headwinds” from freight, wages, and tariffs that would hit the business during this period. Those conditions made it risky to hold large volumes of slow-moving stock.
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How ASOS’s Supply Chain Navigated Inventory Crisis During The Pandemic
The company had to answer three urgent questions:
- How do we avoid locking up cash in the wrong stock?
- How do we make space for the categories that are now in demand?
- How do we protect supplier relationships that we will still need after the crisis?
ASOS’s inventory strategy ultimately entailed cutting, reshaping, and then rebuilding its stock with more control.
First, the company reduced and delayed orders that no longer fit the new demand pattern. For example, it cancelled some of its Spring/Summer 2020 “made own-brand stock” worth around £5–6 million at cost.
They also applied the same strategy to third-party brands, reducing or delaying incoming orders to limit their supply chain exposure to unwanted inventory.
Second, ASOS reshaped what it brought in. It steered orders toward loungewear, sportswear, and self-care categories in line with the new behaviour.
Formal wear and occasion attire gave way to hoodies, leggings, and beauty products that were a better fit for customers stuck indoors. That shift meant warehouse space and working capital were tied to goods with a higher chance of selling through.
Third, the company handled suppliers with care rather than blunt cuts.
Like many in the fashion world, ASOS had to cancel or delay some orders. However, instead of sending a generic notice of order cancellation to suppliers, ASOS managers spoke to factories and brand partners individually about cutting or cancelling their orders.
The company also tried to reuse fabric that suppliers had already purchased, adjust timelines, or rebook styles into later seasons.
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During this period, it also stressed that it would pay in full for orders it had already brought into the supply chain, rather than rely on force majeure clauses to walk away from its obligation to the suppliers.
That move was critical in rebuilding trust with suppliers who had already taken on raw materials and incurred labour risks on ASOS’s behalf.
Finally, the company reviewed its inventory intake almost daily. Merchandisers monitored sell-through by category and adjusted open-to-buy decisions throughout the season, not just at the start.
That cadence was critical to helping ASOS’s supply chain stay closer to real demand rather than a frozen pre-COVID plan.
The Impact Of ASOS’s Inventory Strategy
ASOS supply chain strategy for managing its inventory during this period had both short and long-term effects.
In the short term, cancelling and reducing stock on hand protected cash during the most uncertain months. That way, less money was tied up in unsold suits and party dresses, which would have required heavy markdowns.
By shifting spend toward comfort categories, the company kept revenue flowing from customers whose lifestyles had moved home.
ASOS still had a hangover from prior seasons. Some stock ordered before COVID-19 wreaked havoc remained in the network. The supply chain and sales teams worked hard to clear out old stock in later years.
In its FY23 report, the company reported reducing inventory by around 30% compared to the prior year and clearing roughly 84% of the stock carried forward from FY22. That clearance was possible due to discounts, write-offs, and ensuring all buys were strictly in line with demand.
In the long term, ASOS used the shock to rewire its planning model.
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Senior executives linked the supply chain’s future success to sharper inventory forecasting and faster in-season responses. They invested in central merchandise planning and analytical tools to link sales data, intake decisions, and stock holdings.
ASOS also leaned more on rapid test-and-react ranges, where small batches hit the site quickly and only scaled up if customers responded.
The result is an ASOS supply chain that relies less on huge forward bets and more on shorter cycles, better demand signals, and clear action to clear mistakes.
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Lessons From ASOS’s Inventory Strategy
ASOS’s supply chain strategy for managing its inventory crisis during the pandemic is pretty straightforward, and there are lessons African supply chain professionals can learn from it.
1. Rebalance Product Mix With Speed
When customer behaviour changes, product mix must change just as quickly.
ASOS’s supply chain moved away from suits and evening dresses and toward loungewear, sportswear, and self-care. That shift helped the company stay relevant during lockdowns and reduced the risk tied to underused categories.
A slow reaction is always dangerous for any supply chain, often leading to warehouses filled with items nobody wants, which in turn forces markdowns and lost profits.
2. Treat Suppliers as Long-Term Partners
Although ASOS canceled and delayed orders, it balanced those actions with fairness and communication. The decision to pay in full for many reinstated own-brand orders and to use existing fabrics where possible sent a strong signal.
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It told factories that ASOS was not shifting all the pain downstream. That built trust that ASOS continues to leverage today.
Review how your supply chain team handled COVID-era orders. Did they postpone and explain, or did they disappear? The answer will show how much repair work is needed before the next shock.
3. Clear The Mistakes Quickly
ASOS supply chain did not pretend that all earlier buying decisions were fine. When demand normalized, the company focused on clearing old inventory and reducing stock levels across its network.
Many retailers keep dead stock for too long because nobody wants to accept the write-off. That creates a quiet drag on cash, warehouse space, and attention. ASOS’s inventory strategy is proof that a frank clean-up can be the starting point for a better model.
4. Build Speed Into Planning, Not Just Tighter Forecasts
ASOS did invest in better forecasting and central planning, but it also shortened the time from idea to live product through test-and-react ranges.
That combination matters a great deal because forecasts are always wrong during volatile periods, so the ability to notice the miss early and correct course while the season is still alive will be critical to your supply chain.
Obinabo Tochukwu Tabansi is a supply chain digital writer (Content writer & Ghostwriter) helping professionals and business owners across Africa learn from real-world supply chain wins and setbacks and apply proven strategies to their own operations. He also crafts social content for logistics and supply chain companies, turning their solutions and insights into engaging posts that drive visibility and trust.
