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ASOS.com Aims for Expansion

UK online retailer ASOS.com may target the U.S. and Japan.

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LONDON — ASOS.com, the London-based online fashion retailer, which made its name spotlighting celebrity-influenced looks, is setting its sights globally.

This story first appeared in the July 15, 2009 issue of WWD.  Subscribe Today.

The company began marketing itself in Sweden and Denmark two years ago — it already ships worldwide — and is considering targeting countries such as the U.S. and Japan, with the eventual plan to introduce separate ASOS sites for different countries.

ASOS, like Net-a-porter, appears to have sidestepped the recession that’s hit much of the British clothing industry and has added labels such as Gap and Mango to its mix of house and outside brands.

Last month, ASOS reported sales jumped 104 percent in the year to March 31 to 165.4 million pounds, or $284.8 million, and its net profits doubled during the year, rising to 10 million pounds, or $17.2 million, from 5 million pounds, or $8.6 million in the previous year. Dollar figures have been converted at average exchange rates for the period.

“The continued popularity of Internet shopping provided a strong backdrop [to the results] and with the weakness in sterling, our international sales took a significant step up,” said Nick Robertson, chief executive officer. Nineteen percent of ASOS’s revenues during the year came from international sales.

Robert Bready, product and trading director at ASOS, partly attributed the company’s resilience during the downturn to its target market — 18-to-24-year-olds, who aren’t saddled with heavy debts and mortgages. Bready said operating solely as an online retailer also attracts young consumers too pressed for time and money to make shopping trips to brick-and-mortar stores.

“You log on to our Web site, flick through a couple of pages of product, order it and it’s at your desk the next day — it’s taken five minutes and there’s no other cost,” he said. “You’ve not had to leave your office or eat into your social time.”

At its founding in 2000, the Web site focused on selling clothing that replicated celebrities’ outfits, and was known as As Seen on Screen (ASOS). However, it’s since repositioned itself as a fashion retailer with editorial content that shows celebrities such as Sienna Miller, Alexa Chung and Peaches and Pixie Geldof wearing current trends.

“It’s about being less literal, but still using celebrity as endorsement,” Bready said.

Half the Web site’s sales are made up of ASOS’s own label, designed by an in-house team. The company recently added a higher-end line, ASOS Black, and its own denim label, ASOS Jeans. Other revenues come from high street brands such as Karen Millen, Oasis and Kookai as well as contemporary labels, including Paul & Joe, Manoush and Acne. Gap and Mango will begin selling online in the U.K. through ASOS in August. And to ensure that brands of all levels are comfortable selling on the site, it’s structured so consumers have to specifically navigate to designer brands, meaning a pair of Acne jeans won’t appear alongside a high street brand.

Although ASOS has shown strength during the recession, the company said first-quarter sales growth had slowed to 52 percent from 95 percent in the previous year. Bready said he is “focusing on” the potential impact of the U.K.’s 7.2 percent unemployment rate on young consumers.

However, on the flip side, he said only 44 percent of the U.K. target audience the company recently surveyed was aware of the brand. “With less than half the audience knowing we exist, that’s huge potential to attract new customers,” Bready said.

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