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Asos reports 45% sales boost, while Mulberry turns in 21% online growth

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Asos this week reported a 45% lift in retail sales to £196.3m in the third quarter of its financial year, compared with the same time last year.

The news was followed the following day by luxury brand Mulberry’s announcement of online sales up by 21%. However the company turned in a decline in full-year profits after spending money to grow its presence overseas.

Asos reported UK sales up by 39% to £64.3m but the strongest growth came overseas, where a 59% lift in US sales and a 56% boost to EU sales helped international sales to grow by 48% in the three months to May 31, compared to the same time last year.

Developments during the quarter included the launch of a Russian website.

Chief executive Nick Robertson said UK customers had responded to investment in lower prices, while international sales now accounted for 67% of total retail sales. “We continue to see stronger growth in those countries where we have dedicated websites and in-country teams, notably in the US, France, Germany and Australia,” he said.

Dan Coen, director at advisory and restructuring firm Zolfo Cooper, said: “ASOS is now an international trailblazer for ecommerce. The brand continues to reap the rewards of giving its young target consumers the latest fashion trends via convenient channels. The recent tie-up with affordable chain Primark will only help to cement ASOS’ dominant position amongst its target demographic.

These latest results show the success achievable by conquering international markets. Ecommerce is a global trend and a platform for UK retailers to expand abroad quickly, whilst keeping up to date with the latest consumer habits.”

Reporting full-year results this week, luxury fashion brand Mulberry said its online sales were up by 21% to £17.6m in the year to March 31, and now accounted for 11% of group sales. That helped its total retail sales to grow by 8% to £107.2m in the year, with UK sales alone up by 6% to £86.9m. International sales also grew, up by 20% to £15.4m in the year.

However, a 16% decline in wholesale revenue, to £57.9m, meant total group revenue fell back to £165.1m from £168.5m last time. Pre-tax profits were also down, at £26m, from £36m last time, following investment in new international stores. Mulberry’s results came days after the sudden departure of its well-regarded creative director Emma Hill.

Chief executive Bruno Guillon said: “After three years of rapid growth, we have had a year of consolidation during which we have laid the foundations for the transition of Mulberry from a UK success story into a global luxury brand. In particular we are increasing UK production and enhancing both our retail experience and product range.

“Mulberry has a well-established business in the UK and a growing presence in Europe. With over 80% of our sales derived from these markets where the economic climate remains difficult, Mulberry’s challenge for the future is to accelerate our brand awareness in the USA and Asia. Greater visibility in Asia will allow us to benefit from tourist traffic in Europe and the USA at the same time as growing our business locally.”

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