Asos expected to defy the downturn

Online retailer will take advantage of the limited exposure of department stores on the web, says investment bank

Web traffic at Asos is surpassing that of its peers

Online clothing retailer Asos expects to continue to defy the recession, with traffic surpassing that of other household names, according to a company report published by investment bank Seymour Pierce.

“The addition of another major high street brand, about to be announced, will undoubtedly further boost already buoyant sales,” says the report.

According to the broker, unique visits to the Asos’ web site now exceed five million per month and traffic is starting to outstrip that of online fashion rival Next.

Despite a dip in sales growth from the 118 per cent reported earlier this year, Seymour Pierce estimated that the upcoming addition of a major high street name to its product line may “open up the floodgates” for other brands keen to expand their online exposure, since department stores are still lagging behind on their e-commerce strategies.

Asos is working on its expansion across Europe and, different to many retailers, it has cash reserves of approximately £10m on hand to expand the business.

Seymour Pierce expects the retailer to report pre-tax profit of £14m for 2008/9, rising to £20m in the following year.