Asos defies downturn with festive sales surge
The online clothing retailer Asos has shrugged off the consumer downturn and eurozone crisis to report storming sales over Christmas. The surge in domestic sales at Asos, which delivers to 160 countries, was driven by its core twentysomething customers shopping more frequently, driven by lower prices on clothing and delivery charges.
Asos grew its UK retail revenues by 34 per cent to £35.7m over the month to 31 December, which smashed City expectations.
Co-founder and chief executive Nick Robertson said: "It was the combination of internal things and we improved the whole delivery promise."
He added that Asos enjoyed strong sales of baroque dresses and over-sized jewellery, as well as robust demand for onesies and "novelty" male jumpers, such as those sporting reindeer.
Shoppers were also attracted by Asos lowering its annual payment for next-day delivery by £5 to £9.95 for unlimited orders. The company's UK growth spurt was further helped by its reducing the prices of its clothing by up to 10 per cent in some womenswear categories. But the group's gross margins fell by 0.29 per cent, as it took a hit from the impact of VAT on the proportionately higher sales within the European Union, as opposed to orders outside the region that are not subject to the tax.
Global sales rose 47 per cent but Europe was the star with sales up 65 per cent to £18.4 m. The shares ended up 46p at 2,700p.
l Primark, the discount fashion chain, produced sales growth of 25 per cent in the last three months – a performance that owner Associated British Foods called "outstanding". The shares rose 50p to 1,606p.
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