James Thompson: 'The Barnsley warehouse is helping us go global'
Tuesday 09 November 2010
"Whichever way you skin it, it was a really good first half. This is not just a website doing things abroad – international is now a very material and significant part of our business," said Nick Robertson, the co-founder and chief executive of Asos.
Asos ships to 194 countries outside the UK and, according to the internet traffic specialist Comscore, is now the top fashion website in Australia and Ireland, and number two in Denmark. "We are the biggest fashion website in Australia," said Mr Robertson, "and I have never been to Australia. Our customer base is now a global pool of fashion followers in their 20s."
Mr Robertson added that the UK represents just 3 per cent to 5 per cent of global internet traffic. "The opportunity of the internet is to internationalise quickly. Even if the customer across the globe is feeling the pinch, I am talking to a lot more of them." Asos has established own-language, local websites in Germany and France following the launch of a dedicated US site in September.
It will also open a new warehouse in Barnsley in September 2011, which will initially provide the capacity for £600m sales. This will enable Asos to hit its target of £1bn sales over the next five years. "It [Barnsley] is really underpinning our whole strategy of going global," says Mr Robertson.
Even in the UK, where half-year sales growth to 30 September was slower, the company's UK retail sales still rose by 26 per cent, to £82.4m. But many of Asos's British core customers – females aged between 16 and 34 – are waiting till pay day to splash their cash on Asos's website. Mr Robertson said: "We are seeing a much bigger spike when they get paid – it is less in the middle of the month. It is harder to do business in the UK than it was three years ago."
Asos's strong growth will allow it to negotiate better prices with suppliers, so it won't have to put up its prices on its own-label products next year – despite rising input costs in the far east. Rival fashion retailers, such as Next, have warned that because of the spike in cotton prices this year, and increases in freight charges and rising wages in China, it will have raise its clothing prices by up to 8 per cent in 2011.
But Mr Robertson said: "We are going back to suppliers and saying, 'Our volumes are going up by 50 per cent', [so] we are offsetting all these increases through better supplier negotiations."
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