Shares in Asos, the British online fashion retailer, jumped by 5% this morning after analysts suggested that Amazon could be lining up to acquire it for as much as £50 per share.
Asos has had a turbulent year, with a devastating fire breaking out at its Barnsley fulfilment centre and three profit warnings in less than a year. Its share price this morning is 2,026p, 5% higher than yesterday, but still more than 70% down on the year-to-date after it peaked at 7,050p back in March. This could make it a bargain target for a big retailer to snap up.
UBS analyst Adam Cochrane said that Amazon is keen to increase its exposure to the clothing market and could be willing to pay up to £50 per share for it, which would be a massive premium.
‘The acquisition of Zappos and rollout of Amazon clothing has hinted at the ambition,' he said, 'but we think an acquisition of Asos would increase the strength and number of brand relationships and give access to a fashionable, low price own label offering.’
Speaking to MT back in June, Asos chairman and former Amazon UK boss Brian McBride said he didn’t really see the ecommerce giant as a potential competitor, even if it did move further into fashion.
‘It’s a different business from Asos,' he said. 'It’s about fulfilling - Amazon isn’t really creating demand.’
Perhaps Amazon is seeking to remedy this. In the future could we be seeing fashionable delivery drones clad in skinny jeans criss-crossing the skies?
