Hunger for celebrity looks helps ASOS beat the gloom

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ONLINE fashion retailer ASOS yesterday revealed that it was operating at close to full capacity, as it defied the economic gloom by maintaining sales growth at home and overseas.

Shares in ASOS, whose celebrity fans include United States First Lady Michelle Obama, rose after the firm posted first-quarter sales growth slightly ahead of consensus expectations, and said it was confident about the outlook for Christmas and 2013.

With Britain facing the prospect of a triple-dip recession, many retailers have been finding the going tough, as consumers worry about job security and a squeeze on incomes. ASOS, with its broad international reach, has bucked the trend.

The retailer, which targets young women looking to emulate the designer looks of celebrities like Nicole Scherzinger, said its retail sales rose 30 per cent to £165.8m ($266.5m) in the three months to November 30, its fiscal first quarter.

That compares with analysts’ consensus forecasts of about 29 per cent and growth of 31 per cent in the fourth quarter of the previous financial year.

It reflects a 35 per cent rise in customers to 5.4 million, who are spread around 160 countries.

“I can’t grow much more than these sorts of levels on the basis that I haven’t got more than 30 per cent more stock in the business,” chief executive Nick Robertson said yesterday, adding he was keen that analysts “don’t run away with” the growth forecasts.

ASOS’ first-quarter retail sales in Britain rose 24 per cent to £62.1m, while international sales increased 34 per cent to £103.7m and now represent 63 per cent of total sales.

Mr Robertson was particularly encouraged by the performance in Britain.

“This is our mature market and some people had questioned whether or not we were grinding to a halt in the UK. Clearly that’s not the case,” he said.

“The irony of doing more sales in the UK is that that puts a bit of negative pressure on my margin,” said Mr Robertson.

He said he was “pretty confident” about Christmas trading.

“There was a bit of talk last year that maybe online growth was starting to come off a bit.

“I’m not feeling that, I think mobile and iPad have helped,” he said.