Delay in relaxing Covid restrictions hit Asos sales

DELAY in the easing of Covid-19 restrictions and harsh summer weather led to a slowdown in sales at Asos last month, The Times reported.

The online retailer registered a 27 per cent increase in the group’s revenue to £1.29 billion in the four months to June 30, backed by surge in sales.

The business hailed it as “strong, against a backdrop of continued restrictions on consumers, volatile demand and increased global supply chain pressures”.

Asos, which is focused on young shoppers, said that sales in the past three weeks were muted as young people’s hopes of going out in groups on June 21 dashed following the delay in lifting restrictions.

This resulted in reduced sale of going-out dresses.

Besides, the rainy summer in the UK dampened demand for summer outfits.

In the wake of global uncertainty due to the pandemic, the company expected growth in the fourth quarter to be comparable with last year and full-year adjusted pre-tax profits to be in line with expectations.

This adjustment would strip out £6 million of interest charges related to its £500m bond issue in April and costs associated with its recent £295m Topshop acquisitions.

Asos disclosed underlying sales figures for the last quarter, which showed a slower rate of growth than its reported figures as its level of customer returns was lower than it estimated.

As a result, its fourth-quarter sales in 2020 were higher at £1.1bn than the £1.01bn that it reported last year. Its underlying growth during this quarter was 17 per cent, or 21 per cent at constant currency, rather than the 27 per cent reported growth.

Founded in 2000 by Nick Robertson, Asos is currently valued at £4.68bn, but is still listed on London’s junior Aim market.

“Although mindful of the continued impacts of the pandemic on our customers in the short term, we believe that the structure of the global ecommerce fashion market has changed for ever, which will drive an increase in online fashion sales over the long term,” said Nick Beighton, Asos chief executive.

“We’re excited about the size of the prize ahead of us and the opportunity of delivering on our ambition of being the number one destination for fashion-loving twentysomethings,” he said.

Earlier this week, the company announced to sell Topshop and selected Asos ranges in Nordstrom shops in the US.