Asos is a pioneer of online fast fashion retail. Founded in 2000, its remit was to target young, web-savvy adults with affordable fast fashion online. As a result, when the pandemic struck, it was well placed to service the switch to online shopping that rapidly occurred.
Now selling more than 850 brands, including its own-label items, Asos has morphed into a marketplace for fashion and now sells to some 190 countries.
By 2021, however, it faced growing competition from other pureplays and omnichannel fashion sellers. Where it made gains in lockdown, many other fashion retailers are starting to catch up, having had almost two years to reinvigorate their online services.
As a result, in 2021 active customer numbers rose by just 0.3m to 26.7m over 2021, while gross margins fell by400 base points to 43%. Profitability fell as the retailer discounted to shift slow-moving stock and incurred increased costs from the use of air freight to get around supply chain issues.
Asos purchased the Topshop, Topman and Miss Selfridges Brands from the collapsed Arcadia Group in 2021, as well as buying the Topshop flagship store on London’s Oxford Street, to create a physical retail presence in an attempt to compete – with some success. Across 2021, sales of Topshop brands on the Asos platform grew by more than 200% year-on-year, with the fastest growth in theUK, Germany and the US.
The retailer has made a concerted push in the US in particular, with the retailer now selling its own brands– Asos Design, Edition and Luxe – in two branches of Nordstrom, as well as online through the store’s website, with Asos Curve exclusively available at Nordstrom.com. As of early 2022 the retailer was predicting revenue gains of 10-15% as a result.
This case study was originally featured in the Fashion Sector Report 2022. Download the full report here for actionable insight into the fashion ecommerce market, including key players, growth vectors and consumer habits.