Asos UK sales slow down sharply

Asos’s UK retail sales growth slowed to 1% in the second quarter from 15% in the first quarter of 2011 The head of British online fashion retailer Asos said he underestimated what impact UK macroeconomic headwinds would have on the firm’s second-quarter sales. “We all underestimated what was going to happen in the UK and it hasn’t got any better, it is challenging,” chief executive Nick Robertson told Reuters on Friday after the firm posted a slowdown in its phenomenal sales growth for the three months to 30 September. “So hands up, we probably underestimated that headwind in the UK, but there’s still growth there, so it’s not a complete train crash,” he said. Asos’s UK retail sales growth slowed to 1% in the second quarter from 15% in the first quarter. “Even to support this kind of level of growth we are pulling levers that we didn’t think would have to be pulled,” said Robertson, pointing to increased promotional and marketing activity. He said he expected full-year UK retail sales growth to be “somewhere between flat and low single digit”. But the CEO stressed the real prize for Asos is international growth, where second quarter sales increased 141% and now represent 59% of the total. “The story continues to be, we’ve just got to keep internationalising and internationalising quickly because that’s where we’re going to find the growth,” he said. During the second quarter Asos launched three more country specific sites in Australia, Italy and Spain, taking the total number of sites to seven. Robertson said he hoped to have a Chinese language website up and running in 18 to 24 months. He noted that China is already a top six country for Asos, with Chinese customers using the UK site. Shares in Asos reached a 12-month high of £25.08 in June, fuelled by buoyant trading and bid speculation, but have since lost 40% of their value as the overall market has corrected, directors have sold shares and investors have fretted about the financial health of the younger UK shopper. The stock was down 7.3% at £13.94, valuing the business at about £1.10bn . Asos Retail industry guardian.co.uk

Posted by on October 14, 2011. Filed under News, Politics, World News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.