Asos is stepping up its delivery options as it plans partnerships with high street stores where customers can pick up and return their Asos orders.
The online fashion retailer is in talks with a number of potential partners. Chief executive Nick Robertson believes this is a big opportunity that will be mutually beneficial as it not only extends its own delivery options but will also drive traffic to partners’ stores.
Later this year Asos will also launch a new fashion ‘aggregator’ allowing customers to search globally for brands that Asos may not stock. Robertson said: “This changes us from being just a store to a fashion destination.” This, along with Asos Marketplace, which also launches this year and allows customers and smaller retailers to sell their clothes, continues to extend the length and breadth of its fashion offer.
In its full year to March 31, Asos’s pre-tax profits grew 44% to £20.3m with group sales up 35% to £223m.
International continued to grow strongly, with sales up 95% across the year and soaring 118% in the nine weeks to June 6.
Robertson said he was “very bullish” about this year and has revealed plans for a £20m investment in a new warehouse, which will allow it the capacity for its £1bn five-year sales target. Numis analyst Andrew Wade said: “This warehouse marks a step-change in Asos’s development, being sufficient to take the business to its five-year target of £1bn of sales.”
He added: “Asos’s international markets are rapidly building critical mass, particularly, and crucially, in the US. The recent US monthly sales trend is approaching 200% year-on-year growth, and annualising at £12m of sales already. With US, French and German specific sites to come this year, we expect a step-change in international conversion rates, currently a third of those in the UK.”
Shore Capital analyst Kate Calvert said she expects full-year pre-tax profits for this year to be £26.9m. “The UK appears strong with plenty of innovation and delivering on its international growth plans is key to the share price,” she said.
Robertson said another key part of the strategy this year would be to raise the profile of the company through increased marketing activity. It has already sponsored music events and TV programmes this year, which helped raise brand
recognition among 16- to 34-year-old women from 46% in November 2009 to 62% by March 2010.
Robertson hopes to raise this further to the levels of 80% more typical of high street fashion players.