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Younger customers defy recession to deliver record Asos results

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Online fashion retailer ASOS has marked a decade in businesss with a record set of financial results. Younger customers defied predictions by continuing to spend despite financial uncertainty, helping the trader to a 35% rise in sales to £223m.

Pre-tax profits rose in the year ending March 31 2010 to £20.3m, its full-year results show.

Chief executive Nick Robertson said its customer base of 16-34 year olds “proved relatively resilient to the broader economic climate,” while international sales were also growing.

By the end of April 2010, ASOS offered 36,000 products compared to 22,000 the previous year. Its active customer numbers had risen by 25% to 1.6m at the end of April 2010. The site sees more than eight million unique visits each month.

Basket sizes, order frequency and the number of items per basket had all risen in response to the introduction of free delivery and returns, as well as a new ASOS Premier subscription service free next day delivery and free returns pick-up for £24.95 a year.

The average basket of goods ordered from the UK rose by 11% to £62.74 during the year, compared to £56.48 the previous year. In international sales, the average basket rose 11% to £80.08, from £72.06 last year.

The company communicates with its customers through social media and through its own magazine, which now has a circulation of 450,000. Advertising income from the magazine rose to £2.3m in the year, from £1m the previous year.

And later this year the company is to launch its ASOS Marketplace, where customers will be able to sell their unwanted clothes. A website in the US, ASOS’ second-biggest market after the UK, launches in September, to be followed by French and German sites.

There’s also set to be a greater focus on men’s clothing.

“Our short-term strategy is clear,” said Robertson. “Drive profitable growth in the UK as well as take the ASOS proposition to three key international markets by the end of 2010 as well as shipping to over 160 other key markets.” Distribution is from the UK, where a new £20m distribution centre is being built though US and Irish returns are in country, and similar facilities are to be introduced in France and Germany.

Sales for the first nine weeks of the current financial year have continued to grow, up by 36% in the UK and 118% internationally, an overall rise of 58%.

Robertson said: “We are more confident than at this time last year, with both UK and international sales accelerating well. We are keeping a very close eye on controlling our costs whilst at the same time encouraging the entrepreneurial and innovative spirit that drives all that we do.

“We are excited about the future and believe that online fashion will continue to outperform traditional retail channels. We are at the leading edge of our sector and see enormous potential to drive our business forward, both in the UK and internationally.”

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