September 19, 2012 10:47 am

Asos accelerates growth in the UK

Asos, the online fashion retailer, maintained its sales momentum over the summer after an acceleration of UK growth.

Sales in the three months to August 31 were £141m, up 31 per cent on the same period a year earlier, in line with the growth reported at its last quarterly update.

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UK sales rose 15 per cent, compared with 8 per cent in the previous quarterly update, which covered a slightly overlapping period because of an accounting year-end change. International sales growth fell from 49 per cent to 42 per cent.

“We are back,” said Nick Robertson, chief executive.

He said the UK improvement also reflected the fact that the comparable period in 2011 included the disruption caused by riots in London and some other English cities. Refocusing on Asos’s core 20-something customer and price cuts on its own label products were another aid to growth, he said.

The corresponding period a year ago represented the “weakest UK performance”.

However, UK sales growth had limited the amount of stock the company could sell overseas. “We can’t sell the same dress twice,” Mr Robertson said.

He added that he saw no sign of a downturn in August and early September.

“August is always a bit slower for us. All the kids are in Ibiza and partying,” he said. “But our exposure is only 35 per cent to the UK.”

However, he also said he did not see conditions in the UK improving.

“It has not got any better. It continues to be challenging,” he said.

He said Asos remained in the market for a heavy-hitting retailer. But he would not comment further on speculation that Rob Bready, product director, was poised to quit. Asos has courted Kate Bostock, the former head of non-food at Marks and Spencer, for a senior role.

Bethany Hocking, an analyst at Investec Securities, said the improved performance in the UK would be well-received because it eased fears that the market was maturing. She also welcomed a 0.7 percentage point strengthening in the group’s gross profit margin.

Asos said it expected pre-tax profit for the year to August 31 to be in line with market expectations. Analysts are on average predicting pre-tax profit of just under £44m, Mr Robertson said.

Asos shares were up 3.6 per cent to £21.15 in morning trading. They have risen 23 per cent over the past year.

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