Pandemic boom for Asos as profits triple… and fashion giant predicts customers will continue to flock online even after shops reopen
Asos cemented its status as a lockdown winner as profits more than trebled.
In another bumper set of results, the online fashion retailer posted a 253 per cent rise in profits to £106.4million for the six months to the end of February after sales jumped 24 per cent to £2billion.
And striking a bullish note about life after lockdown, it predicted customers will continue to flock to its website in growing numbers even after shops reopen on Monday.
Lockdown winner: Online fashion giant Asos posted a 253 per cent rise in profits to £106.4m for the six months to the end of February after sales jumped 24 per cent to £2bn
The fortunes of Asos and online rivals such as Boohoo are in stark contrast to those of a number of once mighty High Street players.
In a sign of how the balance of power has shifted, Asos recently bought the Topshop and Miss Selfridge brands out of administration following the collapse of Sir Philip Green’s Arcadia empire.
And Boohoo rescued the Debenhams brand – but not its stores – after the 242-year-old department store chain went bust.
Writing in the Mail today, Marks & Spencer chief executive Steve Rowe admits it has been ‘a bloody tough year’ on the High Street as Covid lockdowns forced many stores to close.
But he adds: ‘People are still shopping. They’re just shopping for different things and in a different way.
‘I don’t subscribe to the naysayers who proclaim shops and the High Street are dead. They just need to change, as does our understanding of what they do.’
Shares in M&S remain nearly 30 per cent down since the start of 2020, while Asos shares have risen almost 70 per cent.
Unveiling its bumper results, Asos said it won 1.5m customers over the six months to the end of February, taking the total to 24.9m.
It also benefited from what it described as a ‘Covid-19 tailwind’ worth £48.5million that will reverse once consumers can spend their money eating out and travelling again.
But it insisted that demand for online shopping would outlast the pandemic.
It said: ‘We are confident that with the return to normal life, underpinned by the successful vaccine rollout in some of our key markets, we will see further strong momentum in this brand.
‘The shift to online retail as a result of the pandemic and the accelerating consolidation of offline retail has increased consumer confidence in shopping online.’
Margins will also improve as demand for ‘sassy and sexy’ dresses and partywear for its ‘generation me’ customers bounces back, and Covid-19 freight costs normalise.
The UK outperformed Asos’ international markets with sales jumping 39 per cent to £800.4million in the six-month period, which covered the second English lockdown in November and the current restrictions.
Business was more muted in its other markets with sales growing 18 per cent in Europe, 16 per cent in the US and 16 per cent in the rest of the world.
Overall revenue growth ‘remained below the levels seen by peers Zalando and Boohoo’, according to analysts. Shares fell 3.4 per cent to 5590p.
Asos said the integration of Arcadia brands Topshop, Miss Selfridge and HIIT – which it bought out of administration earlier this year for £330million – is also progressing to plan. It said the brands have garnered ‘impressive early customer engagement’.