Asos sales growth slows

ONLINE fashion firm ASOS posted a slowdown in its rapid sales growth during its second quarter as its younger customers came under pressure in the economic downturn.

ASOS, which targets internet-savvy 16 to 34-year-old women looking to emulate the designer looks of celebrities such as Kate Moss, Sienna Miller and Alexa Chung, but at a fraction of the price, said its retail sales increased 53 per cent to £106.7m in the three months to September 30.

That compares with a first quarter rise of 69 per cent.

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UK retail sales increased one per cent to £44m, having been up 15 per cent in the previous quarter.

International sales rose 141 per cent to £62.6m, having been up 160 per cent in the first quarter and now make up 59 per cent of the total sales mix.

During the period ASOS launched three more country specific sites in Australia, Italy and Spain.

The second-quarter performance meant first-half retail sales increased 60 per cent to £210.9m with retail margin up about 170 basis points.

“With costs and stock tightly managed and retail margin ahead of prior year, we are confident of achieving results in line with market expectations,” said chief executive Nick Robertson.

British retailers are generally struggling as rising prices, muted wages growth and government austerity measures force shoppers to rein in spending on non-essential items.

But ASOS has prospered, benefiting from a young core customer base, the migration of spending from the high street to the internet and its aggressive push overseas.

Shares in ASOS reached a 12-month high of 2,508p in June, fuelled by buoyant trading and bid speculation, but have since lost 40 per cent of their value as the overall market has corrected, directors have sold shares and investors have fretted about the financial health of the younger UK shopper.

The stock closed at 1,506p on Thursday, valuing the business at £1.19bn.