April 2, 2014, 12:51 PM

Apparel seller ASOS posts a 33% increase in web sales

The British online apparel retailer is speeding up plans to handle as much as 2.5 billion pounds ($4.1 billion) in annual sales capacity within a few years, says CEO Nick Robertson.

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The first six months of fiscal 2014 grew at a healthy clip for British online apparel retailer ASOS Plc, and the company is speeding up plans to handle as much as 2.5 billion pounds ($4.1 billion) in annual sales capacity within a few years, says CEO Nick Robertson.

ASOS, No. 32 in the Internet Retailer Europe 500 in fiscal 2013 posted sales of 769.4 million pounds ($1.28 billion), up 39.2% from 552.8 million pounds ($920.4 million) in fiscal 2012. But in order to grow sales by 225% as soon as fiscal 2017, ASOS will increase its spending on  e-commerce technology, fulfillment capacity and international expansion, Robertson says.

“ASOS is not and has never been about the short-term; the scale of the global opportunity remains as exciting as ever and we are investing for the many opportunities ahead,” Robertson says. To facilitate faster growth and delivery, especially in the United States, ASOS is spending 68 million pounds ($113.2 million) to open or expand new distribution centers with advanced shipping technology in the United Kingdom, Berlin, Shanghai and Columbus, OH. “Our investment during the current year will more than double the sales capacity with greatly enhanced efficiencies,” Robertson says.

In the first part of fiscal 2014, ASOS has built up its mobile commerce base with the rollout of new iPad, iPhone and Android apps for smartphones and tablets, and launched a multilingual monthly fashion magazine for tablet readers. In the upcoming months, ASOS also will update its e-commerce platform with better site search and product recommendation applications and a new “As seen on me” feature that enables users to upload images of themselves to try on and mix and match apparel ensembles.

Today about 37% of sales stem from overseas e-commerce, which ASOS will continue to grow and diversify, Robertson says. ASOS launched a stand-alone Chinese web store in November and plans to open a store on Alibaba’s Tmall marketplace sometime in 2014, he says. ASOS also introduced its “order by midnight and receive the package the next day” service across all of the U.K., expanded next day delivery in France, and sped up delivery times in Australia, Germany, India and Russia. “We are now investing in the capacity to support a truly global business with sales of 2.5 billion pounds as the next staging post on our journey,” Robertson says.

For the six months of fiscal 2014 ended Jan. 28, ASOS reported:

  • Total e-commerce sales of 481.7 million pounds ($802.0 million), up 33.9% from 359.7 million pounds ($598.9 million) in the prior year.
  • U.K. e-commerce sales of 472.3 million pounds ($786.4 million), up 34.1% from 352.3 million pounds ($587.6 million) in the prior year.
  • International e-commerce sales of 180.0 million pounds ($299.7 million), up 30.8% from 137.6 million pounds ($229.1 million) in the prior year.
  • Net earnings of 36.9 million pounds ($61.4 million), a decrease of 18.4% from 45.2 million pounds ($76.4 million) in the prior year.

“This increased pace of investment has reduced our profitability in the period, but will deliver significantly increased capacity as well as efficiencies in the longer term,” Robertson says.

 

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