Sales surge 90 per cent at internet retailer Asos despite consumer slowdown
Tuesday 29 April 2008
Asos, an internet retailer initially set up for customers who wanted to look like their favourite film stars, was feeling stellar itself yesterday as it shrugged off the consumer slowdown to double sales last year.
Asos, short for As Seen on Screen, said sales had risen 90 per cent to £81m in the year to the end of March, in a pre-close trading update. Shares in the AIM-listed retailer closed nearly 4 per cent higher at 310.25p after the announcement, which added that its pre-tax profit was expected to be slightly ahead of market expectations.
The profit expectations would have been better, had it not been for the £1.1m cost of closing its old warehouse, before its relocation to a site with 40 per cent more cap-acity. The chief executive, Nick Robertson, said he remained optimistic about the prospect for Asos, despite the uncertain market conditions.
"We continue to benefit from the increasing popularity of online shopping and we have made considerable investments in management, infrastructure, product ranges and marketing to support and sustain future growth," he said.
Nick Coulter, an analyst at Numis, said Asos had maintained "stellar growth" with these results. Seymour Pierce's Nicholas Linington said it was a "strong update on trading performance despite the challenges in the sector and the opaque outlook for the domestic economy".
Asos is keen to stress it has moved away from its roots of copying the latest Paris Hilton outfit at a fraction of the cost, to become the biggest independent online fashion retailer in the UK. The website, which was set up in 2000, is coming from a small base – less than 3 per cent of the Next brand – but is "aggressively growing," according to Numis. It attracts almost 3 million new visitors a month and is approaching 2 million registered users. Mr Robertson said the awareness of Asos had risen "naturally through the internet," as it launched its own fashion brand and doubled its range last year to 8,300. The signs for this year remain positive, as Mr Robertson said the "in demand" items include prom dresses, gladiator sandals and vintage sunglasses.
The group said trading during the first four weeks of the year was up 80 per cent on the same time last year. David Jeary of Investec said: "Strong current trading appears to be defying the high street hardship."
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