Amazon to Buy ASOS?

By Campbell Phillips | 22 Oct 2012

As yet it’s only a rumour, but at this stage it seems as if the US retail colossus has it’s eye on the successful UK fashion house, ASOS.

According to The Telegraph, the US pureplay giant and leader of the modern retail world, Amazon, is considering to make a bid for online fashion retailer ASOS.

Citing unnamed sources, the article says that Amazon’s interest in ASOS began when both companies’ founders met in Seattle earlier this year. There has also been further fraternising between the two companies recently, according to the report.

“Earlier this month, Amazon’s former UK chief executive, Brian McBride, joined ASOS as chairman,” the article says.

From all accounts, Amazon would surely be interested in making a play to take ASOS under its wing, in much the same way it did for the hot-property shoe pureplay, Zappos, way back in 2009. In doing so, it was able to essentially capture an entire retail category within a business model that worked. If Amazon is also considering the clothing space (why wouldn’t it?), then ASOS could well be the logical choice – especially considering its recent performance.

Amazon is renowned for going after category leaders – the only problem is the amount that Amazon would have to pay for ASOS. Based on it’s current value it would have to be looking at least a couple of billion dollars, and not even Amazon has that kind of money to splurge.

The fashion retailer recorded sales of around $800 million in the last year and continues to roll out its international expansion strategy, with as much as 65 percent of sales coming from offshore sales. Amazon’s only concern in acquiring the retailer can only be the ever-growing price tag.

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