In a sign that web shoppers are a bit more resilient than their high street-plodding counterparts (or else a bit less realistic), online retailer ASOS announced today that its sales almost doubled last year to a record £81m, with profits soaring 117% to £7.3m. The website, which flogs celebrity-inspired fashions to internet-savvy young people, is now getting 3.4m unique visitors a year (second only to Next in the UK) and has just been named ‘Online Retailer of the Year’ for the second year running. So it’s got plenty to smile about.
Not surprisingly, chairman Lord Alli was cock-a-hoop this morning, hailing ‘another set of excellent results’. ‘The business increased its market share, out-performed its peers, and delivered more than double the growth of the overall online market,’ he smirked. ‘ASOS is now firmly established as the UK's premier online fashion business.’
Originally known as ‘As Seen On Screen’, ASOS specialises in cheaper versions of styles made popular by celebrities – for instance, this year’s ‘Sex and the City’ film apparently inspired a retail feeding frenzy for a pair of gladiator-style shoes worn by the film’s star Sarah Jessica Parker, which sold out within days.
All the stars appear to be aligned for ASOS at the moment. Clothing is the fastest growing segment of the online retail market: according to analysts at Verdict it will account for 10% of all clothes sold in the UK by 2010. As prices rise on the high street, more and more shoppers are switching online in search of bargains – which has been responsible for about half of the site’s rapid growth. So while ASOS won’t be entirely immune from the slowdown, it’s probably better placed than most.
But to be fair, the site is also refusing to rest on its laurels. In the last year it’s been investing heavily in its database and CRM systems, so it can do a better job of targeting its marketing promotions; moved to a new warehouse to give it more space (it reckons it can now cope with a fourfold increase in sales); and brought in more high-flying retail execs into its management team. Later this year it’s also planning to launch an eagerly-anticipated bargain site called ASOS Red, which should go down a storm if online shoppers ever do start tightening their belts.
Sure enough, this year’s trading has so far been even stronger than last year, with sales last quarter up 95% on 2007. The credit crunch is all very well, but sometimes you just really need a new pair of shoes...