ASOS Sales Jump; CEO Credits Online Model
British online fashion retailer ASOS said the firm was benefiting from its internet-based model and its expansion into global markets after the company reported a nearly one-third jump in sales.
The retailer , which targets young women looking to emulate the designer looks of celebrities like Alexa Chung, Tulisa Contostavlos and Kate Moss, said on Wednesday its retail sales rose 31 percent to 141 million pounds ($229 million) in the three months to August 31.
“We’ve been seeing growth for 10-12 years now and the key principle is that it’s internet [based] and we’re benefiting from that,” Nick Robertson, Co-Founder and CEO of ASOS, told CNBC Europe’s “Squawk Box”.
He added that the company was taking advantage of a growing and global “20-something, fashion-loving generation, as opposed to just [doing business] in the U.K.”
Full-year sales rose 38 percent to 538 million pounds. The stock rose nearly 2.5 percent on Wednesday morning in London.
The company said fourth-quarter U.K. sales rose 15 percent to 50 million pounds, while international sales increased 42 percent to 91 million pounds and now represent 65 percent of the total.
ASOS said its retail gross margin improved by 70 basis points over the period, even though it cut prices.
The firm, which has changed its the year end of its financial year from March to August, said profit for the five months ended August 31 and pro forma full-year were expected to be in line with expectations.
"We approach our new financial year with continued confidence," Robertson said.
With Britain in recession many retailers have been finding the going tough as disposable incomes have been squeezed by government austerity measures and as wage growth has failed to keep up with price rises.
ASOS, with its broad international reach, has bucked the gloom.
Robertson told CNBC that work was being done on the online platform so it can enter markets such as China and Russia, which will “come on board at some point.”
Robertson told CNBC that expansion into emerging markets would continue the brand’s growth, though it still retained its clothing warehouse in Barnsley, a former mining town in the north of England.
“[Expansion] will just allow us to continue to grow. It won’t be a game-changer, you won’t see a significant upsurge,” he said.
“Today, we still hold all our stock in Barnsley, our product is shipped from the U.K.”
Indeed, he said, as the U.K. sales figures showed the company is outperforming, it could put pressure on international sales.
“I can’t sell the same dress twice,” Robertson said.
Shares in the firm have risen 23 percent over the last three months hitting a 12-month high of 2,101 pence last week.