Asos continues to prosper in the downturn with sales doubling over the past year
Jumpsuits and playsuits, along with harem trousers and colour block clothes, have propelled profits at ASOS beyond City forecasts. The online fashion retailer once again bucked the economic trend, reporting “buoyant” trading over the past month despite the deepening recession.
Clashing colours, high-shine fabrics, ankle boots, ruffled details and 80s-style exaggerated shoulders were also high on the list of fashion best sellers. In menswear, tie-dye tops, bold bright colours and deck shoes have seen big demand.
Sales at ASOS, which specialises in celebrity-inspired fashion, doubled to £165m in the 12 months to 31 March. This prompted the company to predict profits before tax would come in slightly above expectations. Analysts had pencilled in profits of £13.7m, almost double the previous year’s total.
Sales in the past four weeks were up 80% on last year, with international sales soaring 173%.
“We are not immune to the prevailing economic conditions,” said Nick RobertÂson, the chief executive. “However, as widely reported, younger fashion is proving more resilient, internet shopping continues to gain in popularity and our international sales are being bolstered by the weak pound.
“I’m still very positive; that said the world is in crisis. At Christmas, we ran some free delivery weekends when the high street was in meltdown. Hopefully we won’t have to do this again but if we have to we will.”
ASOS said it was becoming “more conservative” in its planning for this year but nonetheless looked forward to “another year of strong growth”.
Founded in 2000 for shoppers who want to buy clothes and accessories worn by celebrities, Asos has emerged as one of few winners of the credit crunch. It is aimed at teenagers and younger women who tend to have fewer financial worries than other people.
The company launched a branded kidsÂwear range called Little ASOS in February, alongside a new luxury range, Designers at ASOS. Own-label products for Little ASOS will be introduced in September.
ASOS has also signed up a number of new brands for the summer, including Mango, Hackett, Gant and Mini Boden.
Active customer numbers (defined as those who have shopped in the last six months) have increased to 1.2 million and registered user numbers to 2.35 million.
Analysts welcomed the trading update. Matthew McEachran of Singer noted approvingly that sales growth has not been generated through promotional campaigns recently. “We remain upbeat about future prospects and on valuation, particularly when taken in conjunction with a huge re-rating elsewhere in the sector,” he said.
The firm is now focusing on its expansion abroad, with finance director Jon Kamaluddin switching to the role of international director. “International is the big focus this year,” said Robertson. Sales abroad currently make up 16% of the total.
John Stevenson of KBC Peel Hunt said: “Current trading provides optimism for the year ahead. The bulk of [international] sales continue to be generated from Ireland and Denmark, with western Europe and the US also seeing demand increases benefiting from the weakness of sterling. With Jon Kamaluddin set to focus on developing international markets, we expect performance from new markets to remain exciting.”
The shares fell 1.75p to 363.25p this morning.
The business remains debt free and had £13.6m of cash at the end of March.
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