British fashion retailer ASOS reports $1 billion revenue, a 10% jump

  • British online fashion retailer ASOS reported revenue of more than £1 billion in the four months ending June 30, a 10% jump, but its sales in the UK dropped slightly.
  • ASOS’ UK sales fell 1.5% — in contrast, UK sales for rival fast-fashion retailer Boohoo jumped 30% in the three months to May 31.
  • ASOS customers have faced longer-than-usual delivery times, “dissuading shoppers from purchasing items they could purchase elsewhere,” a retail analyst at GlobalData said.

ASOS posted a 10% sales boom on Wednesday as it announced that its revenue surpassed £1 billion ($1.2 billion) for the four months ending June 30 — but its UK sales fell.

The British online retailer said that, thanks to the better-than-expected performance, it would repay government funds meant to help it through the coronavirus crisis. Strong demand for its “lockdown” product categories such as casualwear, activewear, and beauty products bolstered sales.UK sales dropped 1.5% — in contrast, its fast-fashion competitor Boohoo in June reported a 30.2% rise in regional revenue in its first quarter, ending May 31, and overall revenue growth of more than 44%.Advertisement

Next-day delivery on ASOS products was unavailable in the UK or Europe for up to seven weeks during lockdown — this could partly explain its underperformance relative to Boohoo, Emily Salter, a retail analyst at GlobalData, said.

Its deliveries “seem to have been more impacted than the Boohoo Group’s during lockdown, dissuading shoppers from purchasing items they could purchase elsewhere,” she said.The company said it remains cautious in its outlook for consumer demand, particularly for the impact of uncertainty on its “20-something customers.”Advertisement

PrettyLittleThing is one of Boohoo’s main brands.ReutersBoohoo’s revenue rose 44.6% in the three months to May and UK sales surged. These figures suggest it grabbed some of ASOS’ UK market share — but they were reported before allegations of low wages and unsafe working conditions at a suppliers’ factory wiped £1 billion off its market value. ASOS made up 2.3% of consumer clothing spending in 2019, compared to 1.5% across Boohoo’s three main brands: Boohoo, PrettyLittleThing, and Nasty Gal, said Sofie Willmott, a retail analyst at GlobalData. Advertisement

She said that the allegations against Boohoo suppliers could put shoppers off, and that “ASOS’ more flexible business model, its wide product range and its reputation as a fair retailer that has implemented measures to protect its staff and work with its suppliers through the pandemic, will afford it more protection than some of its competitors.”

But Aneesha Sherman, a retail analyst at research firm Bernstein, said the Boohoo allegations would not dampen long-term sales, provided the company is seen to take action after its investigation into its supply chain.

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