Asos thrives amid high street gloom

Online retail is buoyant as high street businesses struggle

Online fashion retailer Asos defied the high street gloom by more than doubling its sales and profit in the first trading quarter of 2008.

Revenue for the period ending 27 June rose by 95 per cent and full-year profit before tax more than doubled to £7.3m from £3.4m the previous year. And overall sales increased from £42.6m to £81m in the year to 31 March.

The company said the positive performance comes from the expansion of its product lines, which increased from 4,000 in May 2007 to nearly 11,000 this year.

And the online retailer will begin testing systems this year to support multi-territory and multi-currency transactions.

Despite the slowdown in consumer spending on the high street and the poor performance from businesses such as Marks & Spencer and Next, Asos said it had seen no noticeable decline in growth.

“Everyone is waiting for us to take a tumble and the good news is we absolutely haven’t,” said Asos chief executive Nick Robertson.

“While the macro-economic conditions appear to be deteriorating, I believe we will continue to benefit from the significant migration to online shopping, especially among our core customer base,” he said.

The retailer will expand its service later this year with the launch of Asos Red, offering a range of end of season and markdown stock at discount prices.

Overall UK online retail spending grew 35 per cent to £14.7bn last year, representing a growth rate of almost 10 times, according to research by Verdict.

Sustained growth is set to continue, with retail spending on the web predicted to rise to £44.9bn by 2012. The number of UK consumers shopping online rose 24.7 per cent to 22.6 million last year.