Nick Robertson blames promotional high street for UK sales slowdown.
Hard-hit younger shoppers are being driven from the web back to the high street by promotions, Asos boss Nick Robertson said as the online giant posted a sharp slowdown in first-quarter UK sales growth.
Robertson said: “Twentysomethings have been hit hard. Promotions are all over the high street. I’m sure that’s where they are heading to get bargains.”
The view contrasts with the common perception that younger shoppers are favouring online shopping over the high street in order to hunt discounts.
Robertson said that he sees no respite in the highly-promotional trading environment. He said promotions would characterise Christmas for retailers, and predicts the festive period will be “underwhelming” for Asos.
Although the online giant expects to follow suit and discount during the golden quarter, Robertson said Asos would not apply this strategy indefinitely.
Over the three months to September 30, domestic sales inched up 1% compared with a 15% surge in the first quarter.
The Asos boss said the etailer had been expecting a slowdown in UK sales, but admitted it was “harder and quicker” than it had planned.
The retailer is still forecasting domestic growth this year although Robertson said this will be in single digits. International sales continued to soar for the fashion retailer, leaping 141% over the period, bringing the overall rise in group retail sales to £106.7m, 53% up year-on-year.
Across its first half UK sales rose 8% and international by 150%, resulting in a 60% increase in retail sales to £210.9m. Full-year profits are expected to be in line with expectations. Three overseas sites were launched in the quarter serving Australia, Italy and Spain.
Robertson said Asos is planning to capitalise on its strength in China by launching a country-specific website there within two years.China is its sixth best-performing territory, through Chinese customers using its UK site. International accounts for 58% of Asos’s business. Robertson expects this to grow to almost 90% in the next three years.