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LONDON, United Kingdom — Asos Plc reported a rebound in domestic growth over the holiday season as the UK's largest online-only fashion retailer profited at the expense of its store-based rivals.
Sales in the U.K., Asos’s largest market, rose 23 percent to £300.9 million ($429 million) in the four months ended December 31, the London-based company said in a statement Thursday.
The UK revival demonstrates the market is “far from saturated,” Berenberg analyst Michelle Wilson said in an email.
The growth at Asos, which targets fashion conscious 20-somethings, is part of an accelerating shift online that’s hurting its UK store-based rivals and their billionaire owners. Philip Green’s retail chains, including Topshop, recently requested price cuts from suppliers, citing the increased cost of doing business online. Meanwhile dwindling sales at New Look Retail Group Ltd., part-owned by Christo Wiese, has prompted the company to reassure investors that it has adequate liquidity.
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Asos has emerged as one of the few winners of a UK holiday shopping season characterised by subdued spending. Department-store chains Debenhams Plc and House of Fraser struggled, while grocers Tesco Plc and J Sainsbury Plc announced this week that thousands of management roles would be scrapped amid a drive to slash costs.
In the UK, where sales only grew by 16 percent last year, Asos has introduced same-day delivery and a service that allows shoppers to return unwanted garments free of charge in a bid to defend itself against increasing fashion competition from Amazon.com Inc., which has made the market a priority.
By Sam Chambers; editors: Eric Pfanner and Marthe Fourcade.
