A decade after Asos set up as a small online retailer for people who wanted to dress like celebrities, the group has taken a crucial step towards its target of £1bn in sales with plans to move to a bigger warehouse, as it unveiled record annual results.
Asos, the UK's leading online fashion retailer, announced it was investing £20m as it looked to move from Hemel Hempstead to a 37-acre site in Barnsley. The group's chairman Lord Alli said: "The entrepreneurial spirit is still very much alive but supported now by more robust operating procedures, expertise and processes, all of which will assist Asos in delivering its ambitious aim of £1bn of sales in five years, from five main markets."
Andrew Wade, an analyst at Numis, said the move was "exciting", adding: "With a fully racked capacity of £1.2bn of sales, this warehouse marks a step-change in Asos's development." The warehouse is due to be operational in the next financial year.
Asos – which stands for "as seen on screen" – announced the move at its full-year results presentation. Group revenues rose more than a third to £223m in the 12 months to the end of March, while profits soared 44 per cent to £20.3m.
Revenues soared as the widely predicted slowdown in consumer spending, especially in the group's core 18-34 market, failed to materialise. The group's results were boosted by ongoing trends, including the so-called "outerwear" pioneered by flamboyant pop star Lady Gaga.
Nick Robertson, Asos's chief executive, backed the "strong set of results" but was keen to expound on current trading. The first nine weeks of the new financial year saw sales increase by 58 per cent, which prompted the group to predict "another year of strong growth".
While he revealed that outerwear was still selling strongly, other trends, including "festival season" clothing – in particular denim shorts, sunglasses and Wellington boots – were also performing well. Other big sellers are maxi-dresses and clogs. Womenswear and accessories account for 72 per cent of sales.
"We are excited about the future and believe that online fashion will continue to outperform traditional retail channels," Mr Robertson said, adding that there was "enormous potential to drive our business forward, both in the UK and internationally".
Sales abroad made up 30 per cent of the group's revenues of £63m, shipping to 167 countries. The most important territories include the US, France and Germany, which will be getting their own country-specific sites over the next year.
Mr Robertson said: "We see enormous potential for Asos in international markets and the US in particular." According to data compiled by research group Forrester, the US online clothing market is forecast to grow from $23.6bn (£16bn) in 2008 to $42.7bn in 2014. However, Asos has no plans to set up warehouses directly in the countries, especially with the move to the site in Barnsley. Yet it believes it can match the delivery performance of international companies, especially in the US, after setting up return points in the country.
The group is also in talks with "leading retail brands" – although Mr Robertson remained coy over which ones – to act as pick-up points for customers who do not want clothes delivered to their home or the office.
Asos was set up in June 2000, and has grown into the UK's largest independent online fashion and beauty retailer with eight million unique users a month.