ASOS shares bounce back as firm eyes huge prize

(London) REUTERS: The potential for British online fashion retailer ASOS is ‘huge’ as the shift to internet shopping accelerates, the company said on Wednesday, sending its shares soaring as it beat profit forecasts and flagged years of double-digit sales growth.

ASOS’S current plans are for a four billion pound (US$ 5.3 billion) a year business, in terms of revenue, up from 2.4 billion pounds in the year to August 31.

“But that’s not the end for us. We will continue to invest and we’re eyeing up a significantly bigger prize than four billion pounds,” Chief Executive Nick Beighton told reporters.

“The opportunity for ASOS remains huge which is why we’re investing to capture it,” he said.

ASOS, which sells fashion aimed at young adults, invested 242 million pounds in its 2017-18 financial year, mainly on warehouses and IT, and plans to spend 230250 million a year over the medium term.

While ASOS and online peer Boohoo continue to report robust sales growth, Britain’s traditional clothing retailers such as Marks and Spencer, Debenhams and House of Fraser are struggling and closing stores.

Beighton said online sales currently account for about 24 percent of the UK clothing market and that this is forecast to hit 30 percent within five years. The United States and Europe are following similar patterns.

While ASOS’ market share in Britain is 7.5 percent, it is still tiny overseas, with shares of 1.6 percent in the rest of Europe and 0.5 percent in the United States.