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Last updated: July 10, 2012 11:18 am
Shares in Asos rose more than 10 per cent after the online fashion group posted a solid increase in UK sales, bucking the trend of dismal trading figures from the British high street.
Although Asos’s year-on-year UK sales growth of 8 per cent was the smallest among its four divisions, the figures cheered City investors who have become accustomed to gloomy news from retailers.
In spite of the group’s rapid international expansion over the past few years, the UK remains Asos’s core market, accounting for 36 per cent of total retail sales.
The news pushed up Asos shares 157p to £18.01 in afternoon trading, offsetting much of the 17 per cent fall in late-April when the group failed to hit analysts’ full-year expectations.
Nick Robertson, chief executive of Asos, said changes that the clothing company had made to its UK offerings, such as lowering some of the prices of its men’s and women’s ranges, were “starting to bear some fruit”.
Aim-traded Asos reported retail sales of £136.9m in the three months to June 30, up 31 per cent compared with the same period a year ago, which Mr Robertson said were “particularly encouraging given the current economic climate”.
The figures were aided by stronger growth in US sales, up 83 per cent year on year to £12.9m, while at Asos’s rest of the world division, which includes its Asian and Australian operations, retail sales rose 61 per cent to £43.5m.
Asos targeted Ms Bostock in an effort to strengthen its senior team by bringing in an established retail executive.
Mr Robertson said the retailer wanted to bolster its executive team by “recruiting a bunch of senior managers”, but would not comment on the possibility of Ms Bostock joining the group.
Amid the gloom that has dogged the retail sector over the past few years, Asos’s online focus and international expansion plans have offered investors a sunny alternative. However, this has led the City to expect increasingly high growth figures – something that Asos failed to produce at April’s full-year results. Analysts treat the shares, which trade on an eye-watering 2012 price/earnings multiple of 50, as a cross between a retailer and a tech stock, bringing up an unfair comparison with the retail average of 15. The group’s core affluent twenty-something customer base and solid international expansion plans may make Asos a top-class growth stock, but the shares do not warrant such a lofty rating.
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