Asos sales rise but fashion firm warns of Covid uncertainty

Online fashion giant Asos has voiced caution over how the global Covid pandemic will play out and said it expects volatility in the months ahead.

Asos said it has delivered another strong performance against a backdrop of continued social restrictions
Asos said it has delivered another strong performance against a backdrop of continued social restrictions

The fast fashion firm, which has up to 4,000 people at its warehouse in Grimethorpe, Barnsley, said that profits are being squeezed following increased freight costs and global supply chain disruption.

However, the firm is optimistic about the future, highlighting the ever-growing demand for online clothes and a boom in sales during the four months to June 30, despite high streets reopening as lockdown restrictions eased.

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Customers have also taken advantage of the recent lockdown easing, with more dresses and “occasion wear” rising in popularity.

The company said in an update to the stock market: “Trading in the last three weeks of the period was more muted, as continued Covid uncertainty and inclement weather, particularly in the UK, impacted market demand.

“We anticipate a measure of volatility to continue in the near term, given the rapidly evolving Covid situation worldwide.”

It reported a strong performance in the UK, with increased promotional activity to capture demand despite the reopening of physical stores.

“The final weeks of June saw a softening, due to the impact on consumer demand of continuing Covid uncertainty and unseasonal weather," the firm said.

Sales in the four months to June 30 rose 31 per cent to £1.3bn, including a 60 per cent rise in UK sales to £526.4m – the strongest growth of any of its markets.

Asos' chief executive, Nick Beighton, said: “Asos has delivered another strong performance against a backdrop of continued social restrictions and global supply chain pressures.

“Although mindful of the continued impacts of the pandemic on our customers in the short term, we believe that the structure of the global e-commerce fashion market has changed forever, which will drive an increase in online fashion sales over the long term.”