High fashion online retailer ASOS has announced its half-year results, saying the collapse in Britain’s pound has actually provided a boost in the company’s international sales.
Unlike the rest of Britain’s high street fashion rivals that are suffering from being slumped by a barrage of costs, including rising property prices and higher import charges, online UK retailer ASOS posted a jump in half-year profit and revenue, boosted by strong international sales, siting the weak pound having a positive impact.
ASOS posted a 14 percent rise in pre-tax to £27.3 million in the six months to February 2017, with a sizeable 37 percent increase in sales to £911.5 million.
“As a net exporter, sterling weakness has created a FX tailwind for the business which has enabled investment above previously planned levels into both price and proposition,” the company said in its half-year results statement.
The pound, which has collapsed to 30-year lows since last year’s vote for Britain to leave the EU, still hasn’t recovered and since approximately two thirds of ASOS online orders come from overseas, the fast fashion pureplay has been able to take advantage of this.
ASOS retail sales were also up in the UK by 18 percent to £340.8 million, which is a more promotional market, according to Nick Beighton, chief executive of ASOS. The brand’s customer acquisition rose 29 percent, taking its active customers to over 14 million.
Beighton confirms the company has been reinvesting its profits overseas and improving the customer experience, to “build a bigger and more resilient business to cope with any changes that might happen with the global economy”.
“We have a two-year window to accelerate our business… we’re going harder and faster,” said the ASOS executive. “These are a strong set of results, showing great progress across the business. International growth of 54% has been excellent and with the Rest of the World segment a stand out performer.”
“We’ve accelerated our significant infrastructure and technology projects which remain on track, and Eurohub 2 went live in March. Given the current momentum we are seeing, ASOS is making good progress towards its ultimate goal of becoming the world’s no. 1 destination for fashion-loving 20-somethings,” said Beighton.
ASOS says its goal has always been to offer “the greatest possible choice of relevant fashion at the right price whatever your shape or size,” by focusing on offering the best curated edit of third party brands along with its ASOS label, which combines to give its 20-something target market the most relevant fashion choices.
The company says it will launch its own ASOS Activewear collection during the next half-year period, competing with other brands its stocks such as Puma, Nike, Adidas and Reebok, and will continue to work with third party brands to provide its customers with the most relevant fashion.
The company also says it will be focus on ethically sourcing product through the supply chain, which is something that is important to its target market. “Our 20-something customers care deeply about social issues such as ethics in fashion and the next generation will care even more. This is also highly relevant to our shareholders. We have initiated a wide-reaching plan to drive fashion with integrity throughout our business. The programme includes consolidating our supply base to give us better visibility of working practices, zero tolerance of abuse of workers, particularly children, greater transparency of our supply base and tighter scrutiny of environmental issues where our products originate.”