Young fashionistas keep on spending, says ASOS
ONLINE fashion retailer ASOS brushed aside the consumer fears plaguing high street rivals as it reported a 44% rise in profits and predicted better growth this year.
Nick Robertson, chief executive, said the shift towards internet shopping among young fashion consumers was “bigger than the economic cycle“.
ASOS – targeted at 16-34 year olds with clothes and accessories styled on those worn by celebrities – reported profits leaping to £20.3m in the year to March, but said results could have been even stronger.
Mr Robertson said the group was overly cautious with stock levels last year and added that a 58% rise in sales since the year-end confirmed the resilience of its customer base.
The group’s annual profits marked another record for the group, although growth slowed sharply on the 93% surge seen the previous year.
ASOS, celebrating its tenth anniversary this month, said it “under-potentialised“ by holding back stock levels ahead of a planned consumer spending slump that failed to materialise among its shoppers.
It has since resumed stocking and said sales were soaring in the first nine weeks of 2010, up 36% in the UK and 118% internationally.
“It is too early to assume that these trading levels represent a sustainable trend, however, we have entered the year with much more confidence,” said Mr Robertson.
ASOS, which stands for As Seen On Screen, is also planning a range of new initiatives and further international expansion to “ride rough shod“ over wider industry trading fears.
The group is in talks with unnamed retailers over a potential service allowing customers to order online and pick-up deliveries at other locations.
It is also hoping to launch ASOS Marketplace this year, which will allow customers to re-sell unwanted items.
Pre-vetted small boutiques and designers will likewise be able to sell via the forum, while ASOS has further plans to launch a “fashion finder“ that will include items not sold through ASOS.
“We want to be the resource for fashion,” said Mr Robertson.
The firm is also stepping up its international expansion plans to tap into other markets as UK sales growth reaches its peak.
It is launching a US website this September, with France and Germany to follow later in the year.
The US is already its second biggest market for sales outside the UK as international revenues accounted for around 30% of sales last year.
ASOS has more than 36,000 clothing, accessory and beauty lines and introduces 1,300 new products every week. It has 3.7m registered users.