Asos takes a profit hit as spending mounts up

0 The firm – whose name stands for As Seen On Screen – has been a major British online success

Asos has seen half-year profits tumble as the online fashion retailer blamed expansion costs and heavy discounting for hitting its performance.

The group – whose name stands for As Seen On Screen – saw pre-tax profits slide 87 per cent to £4 million, which it blamed on “temporary transition costs”.

Sales jumped 14 per cent, or 12 per cent at constant currency, to £1.3 billion in the six months to 28 February. UK sales rose by 16 per cent and international sales by 12 per

cent. But the firm bemoaned a “disappointing” set of figures, pointing to costs relating to adding new warehouse capacity and a high level of discounting and promotional activity across the market.

Boss Nick Beighton said: “We have identified a number of things we can do better and are taking action accordingly. We are confident of an improved performance in the second half and are not changing our guidance for the year. We are nearing the end of a major capex programme.”