Technically, Asos actually saw a slight decline in pre-tax profits, from £20.3m to £15.7m – but only because it forked out £12.9m on a new, super-high-tech warehouse. With those costs stripped out, profits actually rose by 41%, to £28.6m. And while UK sales rose by a quarter to £184m, new launches also went down well with the fashion contingents in the US, France and Germany – so much so, in fact, that sales abroad more than doubled to £140m. Nick Robinson, the company’s CEO, reckons there’s plenty more where that came from: ‘We’re excited by the opportunities for both our UK and international businesses,’ he said today.
Less optimistic is Kingfisher CEO Ian Cheshire, who has cautioned that the DIY chain owner’s year might turn out to be tougher than its sunny quarterly results would have us believe. Like-for-like sales in the 13 weeks to the end of April rose by 3.3% to £2.7bn, while profits rose by £174m – that’s a 21% hike if you strip out currency fluctuations.
Cheshire credited the royal wedding and general sunny weather for the rise – i.e. a combination of sales-boosting events that are unlikely to be repeated over the rest of the year. So while outdoor furniture and paint flew off the shelves, ‘indoor projects’ weren’t quite so rosy (or should that be Satin Pink Sugar?), with sales of indoor paint falling by 10%. Still, the firm’s UK sales were up by 1.4%; and its French chain didn’t do too badly, either, with sales growing ‘ahead of the market’.
Presumably, Cheshire et al have been spooked by The recent collapse of Focus DIY, which went into administration last month, shows that this is a tough sector to be in. But it’s also an opportunity: Cheshire has just ploughed £23m into 31 of the properties vacated by the erstwhile chain. Which, when you think about it, is less like fixing the roof when the sun’s shining, and more like building an extension.