Asos and B&Q make hay while the sun shines

They may be very different retailers, but they've both been beating the odds by performing well recently. Though Asos' long-term prospects look better...

by Emma Haslett
Last Updated: 06 Nov 2012
It’s been a tough couple of years for most retailers – with the exception, apparently, of Asos, for whom everything has been as peachy as this season’s pleated midis. The online fashion retailer has reported a sharp rise in, well, just about everything on last year, with revenues up by more than half to £339.7m in the year to March. But while online is, without a doubt, outperforming the high street, bricks-and-mortar retailer B&Q hasn’t been doing badly lately. Although the picture there is slightly more complicates…

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.

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