Asos Shares Tumble After Cyber Attack Threatens Data Leak

Asos shares fell more than 12% after the fashion retailer confirmed that customer data may have been stolen following a cyber incident. Users of the Asos app received a notification on Tuesday morning stating, "Dear Asos DPO and IT, we have fully compromised the Snowflake instance. Engage with us, or we will leak it."

The company is investigating "unauthorised activity involving third-party platforms that we use to communicate with customers," according to a statement. Asos indicated that while customer names and contact details might have been accessed, it does not believe that payment information or passwords were compromised.

The incident occurs at a challenging time for Asos. While the company experienced a surge in business during the COVID-19 lockdowns, it has faced difficulties in subsequent years due to decreased demand, rising costs, and increased competition. Asos's turnaround plan, which includes efforts to reduce excess stock and limit returns, had recently begun to show positive signs, with shares up 72.9% for the year.

Analysts noted that the cyber incident, while concerning, does not appear to be as disruptive as a previous hack that affected Marks & Spencer last year. At that time, the M&S hack impacted most of the retailer's systems, leading to weeks of inability for customers to place online orders. In contrast, Asos stated that its website and app are operating normally with no current disruption to its operations.

Dan Coatsworth, head of markets at AJ Bell, commented that the incident happened at a "terrible time" given the recent positive indicators for the business. He warned that the company risks losing customer trust if its systems are perceived as insecure. However, John Stevenson, a stock analyst at Peel Hunt, suggested that the current incident seems "very different" from the M&S attack and appears to be a "fairly basic data breach" that may not significantly impact the company's ability to trade.

Katie Cousins, an equity research analyst at Shore Capital, noted that Asos has made progress in addressing fundamental issues and is focusing on customer re-engagement and sustaining sales volumes. The company has cyber security insurance, including business continuity insurance, but it is too early to quantify any potential impact on trading. Asos stated that customer trust is important and that further updates will be provided if the situation changes.