LONDON: British online fashion retailer Asos said yesterday its long-term growth ambitions were as strong as ever, after it posted a 22 percent fall in first half profit that reflected a step-up in its investment programme.
Asos, whose fast-changing fashions are a global hit with internet-savvy twentysomethings, been the great success story of British retailing since it floated at just 20 pence in 2001, compared with the 1005 GMT price of 5,176 pence, a rise of 0.4 percent on the day.
“Fundamentally the story’s still as strong as ever, the opportunity’s probably stronger than ever,” founder and Chief Executive Nick Robertson said. “We are on line to hit our £1bn ($1.7bn) of sales (target) this year (2013-14), which means we’ve got to grow at 30 odd percent for the second half. I’m comfortable with that.”
Shares in ASOS, whose celebrity fans include United States First Lady Michelle Obama and British singer Rita Ora, fell eight percent on March 18 when the firm reported that sales growth slowed in February.
It had also warned that faster investment in warehousing in the UK and Germany to give the firm a sales capacity of £2.5bn, as well as start-up costs in China, would hit annual profit.
“We had to report the two-month period and it did show a softening of sales in February,” said Robertson, who owns 9.3 percent of Asos’ equity.
“People then suddenly take that as the new run rate. Well, categorically that’s not the case.”
Asos, whose shares are still up 54 percent over the last year, has a current market capitalisation of £4.3bn — more than four times the value of Britain’s 200 year-old Debenhams chain. “Take a 12-year view of the shares as opposed to a two month view of the shares,” said the CEO, the great grandson of tailor Austin Reed.