Asos shares tumble after cyber hack: Will incident hit embattled fashion firm's recovery?

Asos shares tumbled more than 12 per cent today after a phone alert from the company's app told customers it had been 'hacked'.The fashion retailer has confirmed customer data may have been stolen, after users of its app received a notification on Tuesday morning with a message titled 'ASOS HACKED'.It read: 'Dear Asos DPO and IT, we have fully compromised the Snowflake instance. Engage with us, or we will leak it.'The fashion retailer later said it was 'investigating unauthorised activity involving third-party platforms that we use to communicate with customers.'While customer names and contact details appear to have been stolen, Asos said it did not believe payment information or passwords had been compromised. The incident couldn't have come at a worse time for the clothing giant. Asos enjoyed booming business during the Covid lockdowns, but has had a tough time in the years since due to waning demand, growing costs and greater competition from the likes of ultra-cheap Chinese behemoth Shein.Blow: Analysts said that the cyber incident at Asos did not seem as disruptive as the hack that hit Marks & Spencer last year - but it could spook customers at a key timeIt has tried to stem the decline by ridding itself of excess stock and clamping down on excessive returns, including steps to ban customers from its platform.Its turnaround plan had recently started to show green shoots, with shares up 72.9 per cent this year. Bosses will be worried about the impact of today's events on the firm's recovery. Dan Coatsworth, head of markets at AJ Bell, said the incident had come 'at a terrible time' as it was 'happening so soon after positive signs of a business turnaround.'He added: 'The company risks losing customer trust if there is a sense that its systems aren't secure.Latest in a long line of hacked firmsHousehold names to be impacted by cyber attacks over the past year include Marks & Spencer, Jaguar Land Rover and Harrods.'While the cyber incident is still unfolding, Asos will be starkly aware of the risks of any hack to its business,' Coatsworth continued. 'It wasn't long ago that Marks & Spencer was knocked for six by a cyber-attack and that had a major negative impact on its earnings.'But not all cyber attacks are created equal. John Stevenson, stock analyst at Peel Hunt, said this incident seems 'very different' to the attack on M&S by teenage hackers last spring.He said: 'We don't know how far this has gone yet but based on the information we have at the moment it looks like a fairly basic data breach - it shouldn't impact its ability to trade.'By contrast, the M&S hack impacted most of the retailer's systems and customers were unable to make online orders for weeks.Although the business could still feel 'reputational' side effects if some customers feel 'less secure than they did yesterday', Stevenson said he did not think there would be a 'material impact' on the brand's recovery.The retailer has seen its number of active customers begin to grow again and has had a major restructure, involving selling warehouses and discouraging customers from returning clothes.Katie Cousins, equity research analyst for investment bank Shore Capital, added: 'Asos has spent the last few years successfully fixing fundamental issues, and the strategy now is all about re-engaging the customer base and sustaining positive sales volumes, which it has made good initial progress on.'Whether that progress will continue in the wake of the cyber incident remains to be seen. In a statement on Tuesday, Asos said: 'We took immediate action to restrict access to the notification platforms and are working with our internal and external specialist advisers, as well as all relevant authorities.'Basic personal information including name and contact details may have been accessed. We do not believe that payment-card information or account passwords, were impacted.'Our website and app are operating as normal, with no current disruption to any aspects of our operations. Customer trust is incredibly important to us, and if the situation changes an update will be provided as appropriate.'The company has cyber security insurance with a large global provider, including business continuity insurance. It is too early to quantify any potential impact on trading.'DIY INVESTING PLATFORMSAJ BellAJ BellEasy investing and ready-made portfoliosHargreaves LansdownHargreaves LansdownFree fund dealing and investment ideasinteractive investorinteractive investorFlat-fee investing from £4.99 per monthFreetradeFreetradeInvesting Isa now free on basic planTrading 212Trading 212Free share dealing and no account feeAffiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.Compare the best investing account for you