Fashion website Asos said today that sales rocketed to £165m in the 12 months to March, 104% up on the previous year, while full-year profits were likely to come in ahead of forecasts (which were around the £19m mark). Clearly Asos has been one of the few big success stories of the downturn – and given that it’s expecting another stonking year in 2009/10, it’s unlikely to fall out of favour with the stock market any time soon. Clearly the youth of today aren’t prepared to be off-trend just because the economy’s going to the dogs.
Chief exec Nick Robertson insisted the e-tailer wasn’t immune to the prevailing gloom; indeed, he’s scaling back some of its expansion plans for 2009/10, just to be on the safe side. But he says that the popularity of internet shopping continues to grow, while youth fashion – his target market – is proving ‘more resilient’. In other words, while the rest of us are tightening our credit-crunched belts, our feckless youth are just logging on and buying new ones. Still, we shouldn’t complain – perhaps they’re just budding Keynesians, eager to pump money into the real economy.
Either way, the good news for Asos is that business isn’t just holding up, it’s positively booming. Robertson said current trading ‘remains buoyant’, with sales in the first four weeks of its new financial year up 80% on the same period in 2008. And the weakness of the pound is also boosting its coffers: international sales are up 173% so far this year. The Government keeps telling us the weak pound will ultimately help exporters (like they’ve done it deliberately) but Asos is one of the few to be cashing in already.
So what next for Asos? Well, it expects to keep taking business off the high street as more of us choose to shun the crowds (such as they are these days) and shop online. And Asos wants to be the market leader: it’s signing up more and more fashion brands (like Hackett and Gant), introducing its own childrenswear range, and going all Web 2.0 by launching a new community platform (so you can tell everyone all about that new pair of jeans after you’ve bought them).
Most retailers are having a pretty tough time at the moment - but if you're going to be in any segment, online youth fashion is clearly the place...
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Asos thriving as shoppers go postal
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