Fashion retailer Asos has quadrupled full-year profits on the back of rampant online shopping among locked down consumers. The e-commerce firm reported profit before tax of £142.1m for the year to 31 August, up from £33.1m the year before.
Lockdown success for Asos
Digital fashion retailer Asos is riding high after profits before tax skyrocketed by 329% to reach £142m for the year to 31 August.
UK retail sales were up by 18% to reach £1.17bn, while group revenue was buoyed 19% to reach £3.26bn.
Not all of these increases were attributable to lockdown behaviours, however; the removal of £50m in non-strategic costs to ’drive greater efficiency’ was also touted as a contributing factor.
International sales followed the trend with a 20% jump to £1.9bn and total visits increasing 19% versus the year prior. Total orders increased 11% to 80.2m.
A bright spot for online retail
A bumper 2020 means Asos now counts 7 million active customers in the UK alone with premier subscriptions for customers seeking free next-day delivery expanding by 30%.
Overall Asos has observed a ’pronounced shift towards more deliberate purchasing during lockdown’, compensating for a fall in sales of items related to ’going out’.
One downside of the pandemic has been that Asos has incurred ’incremental’ costs relating to increased safety measures to protect warehouse staff, as well as incurring higher air freight costs and additional investment in customer-facing roles to stimulate demand.
Such expenditure was eclipsed by a ’significant reduction’ in marketing spend, which was cut to avoid overextending its capacity to deliver.
Chief executive, Nick Beighton, said: “As well as protecting staff, suppliers and customers, we’ve driven efficiency and have emerged a stronger, more resilient and agile business whilst delivering strong profit and cash generation.“
Beighton adds: “While life for our 20-something customers is unlikely to return to normal for quite some time, Asos will continue to engage, respond and adapt as one of the few truly global leaders in online fashion retail.“