UK: Asos posts 41% December retail sales growth
Online fashion retailer Asos has posted strong trading over the Christmas period, with retail sales rising 41% during December.
The retailer today (17 January) said retail sales reached GBP78.1m during the month, up from GBP55.4m in the same period of the prior year.
CEO Nick Robertson said the group's UK performance was "particularly strong", with sales surging 34% to GBP35.6m. He said growth "continues to be driven by better conversion of traffic alongside continued investment in both our proposition and pricing".
International sales rose 47% in December to reach GBP42.4m, accounting for some 54% of total sales. However, retail gross margin fell 29bps on the prior year.
"We remain positive in our outlook for 2012/13 as we continue our journey to becoming the number one online fashion destination for twenty-somethings, globally," said Robertson.
Commenting on the results, Conlumino analyst George Scott said that Asos has "demonstrated impressive growth at home, as well as abroad," adding that depite claims the UK business is reaching a more mature state, its UK performance is a "highlight, continuing momentum from its spring/summer trading".
Scott said: "Most notably, expansion of its own label offer has given Asos competitiveness at the entry-level, especially among men, which is a key growth segment; indeed its offer of Christmas jumpers hit the right note with fashion conscious, value-savvy consumers looking to jump on the bandwagon of this seasonal fad.
"Elsewhere, Asos continues to expand its offer of edited fashion lines by both well known and more independent labels, affording it a balance of mass appeal and 'underground' brand equity.
"The etailer ultimately ensured its offer was well positioned during the seasonal period, making effective use of staggered, targeted discounting in the run up to Christmas."
However, Kantar Worldpanel analyst Ian Mitchell believes there are threats to the retailer's future growth.
"More and more shoppers are turning to ‘everything on one website' retailers for their fashion purchases. Amazon was one of the big winners in online fashion in 2012 and the websites of department stores and supermarkets are growing faster than those of specialist fashion retailers like ASOS. In the future we may start to see specialists suffer as a consequence.
"Despite some big name casualties in other markets, physical stores still account for over 80% of fashion sales and, with volume growth returning to this channel at the end of 2012 for the first time in four years, bricks and mortar fashion retailers are very much alive. ASOS should consider the positives of physical stores as a way of maintaining strong growth numbers in the future"
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