When metrics move, it triggers an equal mix of curiosity and excitement. Not for the number itself, but for what it means. Something has changed.
The question I keep coming back to: how often do we build investment cases around customer research and internal objectives, without the broader market context?
In my experience, annual reports are one of the most underused sources of competitive intelligence available. They’re public, primary source, and directly from the business — signalling where competitors are investing, where they’re struggling, and where the risks and opportunities lie. Most product managers never open one, and I think that’s a missed opportunity.
To illustrate, I’ve pulled together an analysis of ASOS and Boohoo, extended from a study I conducted in 2022 to the latest year. All data taken directly from their investor sites.
Before we hit the rails
Before diving into metrics, a quick read of the industry helps identify which ones matter. Here’s what shapes this one:
- E-commerce is capital intensive — technology, infrastructure and fulfilment don’t come cheap
- Consumer loyalty is earned every transaction
- Suppliers and inflation squeeze from the cost side simultaneously
- Inventory management is where strategy meets reality
For simplicity, I’m focusing on a subset of metrics, although these should still help us understand some of the dynamics at work across these companies:
Asset utilisation — how much revenue the business generates for every £1 invested in assets: warehouses, technology, infrastructure, and working capital including stock.
Inventory days — how many days of stock a company holds, important for understanding stock turnover, tracking liabilities and avoiding stagnation. For online retailers, high returns rates can inflate this further as returned stock re-enters the warehouse.
ROCE — for every £1 invested in the business, how much operating profit is generated after costs. Positive means returns; negative means capital is being destroyed faster than it can be earned back.
Were they dressed for success?
In 2019, ASOS was generating £2.7bn in revenue, more than three times Boohoo’s £857m. Yet Boohoo generated £58.7m in operating profit against ASOS’s £35.1m. Scale wasn’t the advantage it appeared.
Boohoo was shifting stock twice as fast as ASOS — 63 days versus 140 days. Boohoo was a lean operator, built around small production batches, rapid stock replenishment and own-brand inventory. This was a key differentiator, providing a nimble response to new fashions without locking up significant capital.
ASOS had capital tied up in inventory for over 4.5 months. Although ASOS have been growing own brand products, which provides increased control, growing the number of partner retailers naturally stress tests inventory management across more diverse product lines.
The asset utilisation gap is worth noting. ASOS was generating £5.78 of revenue for every £1 of capital employed — nearly twice Boohoo’s 3.09x. This shows that the larger, more complex business was working its asset base harder. Both models were working, but in different ways.
Despite this complexity, both businesses were generating returns — Boohoo at 21% return on capital employed, ASOS at 7%. Two different models, both working until 2022–24 where returns on capital turned negative.
What did the acquisition actually cost?
Boohoo’s acquisition of the Arcadia brands and Debenhams represented a fundamental shift in scale and complexity. What had been a lean e-commerce business became a marketplace for a broader portfolio of brands. The consequences were significant — inventory days doubled after the acquisition, driven by taking on existing stock from new brands and dealing with increased supply chain complexity.
ROCE tells a similar story. In 2019, for every £1 invested, Boohoo generated 21p in profit after operating costs were deducted. By 2022–24, that had turned negative — the acquisition bets, the new distribution centres, and the expanded brand portfolio were consuming capital faster than the business could generate returns on it.
ASOS, which had generated 7p of profit for every £1 invested in 2019, faced its own version of the same pressures. High stock levels, a reduction in demand and US distribution investments that didn’t pay off resulted in an 11p loss for every £1 spent by 2022–24. For a business of ASOS’s scale, that amounted to roughly £220m of operating profit destroyed per year.
Both businesses were caught between the same structural forces — price-sensitive consumers, supplier cost pressures, inflationary headwinds, and an increasingly competitive market where companies like Shein were establishing themselves at exactly the price point both businesses had built their models around.
Are they showing signs of life?
In 2025, both businesses show signs of rebounding, holding less stock, reducing liabilities and running a more efficient operation. Boohoo, now rebranded as Debenhams Group, has moved toward a diversified marketplace model. ASOS has invested in reducing inventory cycles.
However, the overall picture is more cautionary. Operational efficiency is improving, inventory days are falling for both businesses, asset utilisation is recovering, while ROCE remains deeply negative for both. The operating machine is running better, but the returns have not yet followed.
What’s the bottom line?
Both businesses are significantly smaller than they were at their peak. Boohoo’s revenue has fallen from £1.98bn in 2022 to £790m in 2025. ASOS from £3.94bn to £2.48bn. The revenue decline isn’t simply a market story — the annual reports tell us why. Active customer numbers have fallen sharply for both businesses. For ASOS, active customers dropped from 26.4m at peak to around 18m by 2025. The revenue contraction follows directly from that customer loss. The operating machine may be improving, but the audience it is serving has contracted significantly.
That makes the path back to positive ROCE considerably harder than the operational metrics alone suggest. The revenue base on which returns need to be rebuilt has already contracted sharply — and rebuilding it requires winning customers back in markets that are more saturated than they were in 2019.
Understanding your market and where to differentiate
Annual reports surface the structural dynamics shaping a market — where competitors are investing, where they are struggling, and where the operating model is under stress. In fast fashion, inventory days is one of the most revealing signals. How much stock a business holds, how fast it moves, and how well supply chain processes support a nimble response to changing trends — these are not just operational details. They are strategic choices with direct consequences for capital efficiency and competitive positioning. Understanding where a competitor is exposed creates the space to differentiate.
Making smarter investment decisions
For product managers, this context sharpens rather than dominates the investment case. The decisions we make — what to build, where to invest, and how to prioritise — need to be grounded in more than customer research and internal objectives. Understanding the market dynamics, the value chain, and where competitors are generating or destroying returns gives you more intelligence for deciding where to place your bets. That rigour matters — not just for making better decisions, but for asking incisive questions.
Business acumen as a product skill
There is rarely more than one degree of separation between the product decisions a team makes and how those decisions land in the metrics that matter to the business. Customer retention shows up in active customer numbers, average revenue per customer and order frequency. Feature investment shows up in asset utilisation. The quality of product decisions shows up, eventually, in ROCE.
For public companies those signals are visible and accountable in the annual report. The same logic applies wherever capital is being invested in building products — the signals are just harder to see when they’re not publicly visible.
The metrics I’ve used here — asset utilisation, inventory days and ROCE — are three of many that can be derived from a standard annual report. They’re not complex to calculate. What takes judgement is knowing which ones matter for your industry, what they reveal about the operating model beneath the surface, and how to connect the financial signal to the strategic question you’re trying to answer.
That’s the skill worth building.
All figures used in this analysis were taken directly from the Boohoo Group plc and ASOS plc Annual Reports 2019–2025, available from their respective investor relations sites. 2020–21 figures have been excluded from period averages due to pandemic distortion of operating conditions. The 2022–24 figures are shown as a three-year average to smooth single-year volatility. Boohoo FY2025 reflects continuing operations only following significant changes to their portfolio.