Asos profits down 22% following expansion costs
Online fashion retailer Asos saw a 22% fall in profits in the first half of its financial year as the company increased its investment in logistics and technology.
In the six months to 28 February 2014, group profit fell to £20.1 million from £25.7 million in the same period a year earlier despite group revenues rising 34% to £481.7 million.
Retail sales climbed by 34% overall with UK sales up 32% and international sales up 35%. In addition, the retailer increased its number of active customers by 36% to 8.2 million.
Asos has accelerated its investment in logistics, its IT platform and overall customer offering, as well continuing to invest in its China start-up. A £68 million investment during the current year will be used to expand capacity at its UK and US warehouses and to launch a Eurohub in Berlin and a new warehouse in Shanghai.
Never Miss a Retail Update!Nick Robertson, Asos chief executive, said: “We are now investing in the capacity to support a truly global business with sales of £2.5 billion as the next staging post on our journey.”
He added: “This increased pace of investment has reduced our profitability in the period, but will deliver significantly increased capacity as well as efficiencies in the longer term. ASOS is not and has never been about the short-term; the scale of the global opportunity remains as exciting as ever and we are investing for the many opportunities ahead.”
