Asos: planning to reach £4bn turnover
Pureplay Asos today set out how it plans to more than double its sales to £4bn a year, after a year in which revenue reached £1.9bn.
Fast-fashion trader Asos , a Leading retailer in IRUK Top500 research
, said that group revenues of £1.9bn for the year to August 31
were 33% up on the same time last year, or 27% once currency fluctuations were discounted. Retail sales of £1.88bn were 34% ahead. UK sales of £698.2m were up by 16%, while international sales of £1.2bn were 47% up on last time. Pre-tax profits of £80m were up by 145% – or 26% before exceptional items.
Chief executive Nick Beighton said: "It’s been a great year for Asos, with continued growth in sales and profits. Our international performance was excellent, as we reinvested FX tailwinds and benefitted from our continually improving customer proposition. In a competitive UK market, we achieved strong full price performance whilst further increasing market share.
"At the same time, we ramped up our investment in building the increasingly strong and differentiated Asos proposition.
Our new agile technology platform is allowing us to accelerate our pace of innovation with great benefits for our
customers, including new payment methods and additional language sites to come. The investments we are making will
see us add 1,000 new heads and will lay the foundations for a c.60% increase in unit capacity and c.£4 billion of net
Here's what Asos said about how it plans to get there.
Boosting capacity through technology
Asos' new technology platform gives it micro-service architecture with a native mobile experience through both Android and IoS apps, as well an improved checkout. "The platform allows for significantly greater transaction volume at enhanced levels of stability," the retailer said in its financial statement. It pointed to the increased ability to deliver technical change and innovation at speed. During the last year alone it counted 1,300 technology releases, up from 490 the year before. Among them were the roll out of Apple Pay, a reworked My Account section, and new image search capability. In the year ahead it plans still more improvements, including new payment methods, new language sites and stronger customer engagement.Currently it has seven country-specific sites and it plans a further six over the coming year, with an ultimate target of reaching all of its more than 200 markets.
Boosting capacity through warehousing and logistics
Asos is working to double the capacity of its Eurohub 2 fulfilment centre, and is also opning a new fulfilment centre in the US, expected to be up and running by next autumn. It says its investments in logistics will lay the foundations for a 60% increase in capacity and for net sales of £4bn a year.
It has now taken its click and collect service into markets including Italy and the US, where it has a total of 11,000 collection points across the two markets. In the UK it now offers collection from a choice of 9,000 pick-up points. Expansion will continue in France, Germany, the Netherlands, Sweden and Australia over the coming year.
Delivery has also seen improvements, with order tracking now standard in 61 markets, same-day delivery in London, and, to come, evening next-day delivery in Germany.
Asos says that it still has a "relatively modest" share of online sales, especially in its international markets, and will continue to grow the business "at pace" to take advantage of the global opportunity. In addition, it says that the shift towards online retail will gather pace, and that it is well placed to benefit from that. Already, the online apparel market has, it says, grown at more than twice the rate of the overall apparel market.
Asos is also continuing to develop its own brand clothing, which currently accounts for 41% of its sales. Students are a particular focus for marketing in territories from the UK and the US to Italy and Germany.
Improving customer service
Asos ended its financial year with 15.4m customers – a 24% rise on the previous year. Visits were also up by 24%.
Asos says it provides best-in-class customer service, with 24/7/365 support via email, live chat, social media and over the phone in nine languages. It promises to reply to all emails within an hour, social media messages within 15 minutes and to answer phone calls and live chats within 30 seconds.