Asos today reported a 30% leap in sales this autumn, and said the fastest growth was still coming from international markets. But profit margins were down as the company invested in price promotions.
In a trading statement for the three months to November 30, the fashion retailer said group sales rose by 30% to £165.8m, from £127.1m at the same time last year. Some 63% of its sales now come from overseas, compared to 61% last time.
UK sales were up by a healthy 24% but were outpaced by a 34% boost to international turnover. The biggest growth came from the US, where sales rose by 57% to £19.0m and where Asos has now opened an office. EU sales were up by 15% at £33.3m and rest of the world sales up by 42% at £51.3m. Asos also opened offices in France and Germany during the quarter.
“Our UK performance was ahead of expectations at 24%, driven by better conversion of traffic alongside continued investment in both our proposition and pricing,” said chief executive Nick Robertson.
On its international performance, he said: “Once again, the performance of countries where we have dedicated websites was significantly better than the EU performance as a whole.” And he added: “The retail gross margin performance [down by 100 basis points (bps) compared to a 400bps rise at the same time last year] reflects a combination of a particularly strong comparative period, the UK accounting for a larger percentage of the total retail sales mix than initially planned and continued price reinvestment.”
Our view: Nick Robertson’s comment that dedicated overseas websites perform “significantly better” than sites than simply offer overseas delivery will be of interest to all those watching Asos’ international success with a view to emulating it. The perennial question is whether the cost of investment in a dedicated country website is justified by the sales returned, and in Asos’ case, at least, the answer would appear to be yes. Others, though, will evaluate their own strategies to find an answer that fits their business.
