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International business back on track in 18 months, says Asos boss

Asos.com chief executive Nick Robertson has said the etailer’s international business will be back on track in 18 months rather than the two years originally expected.

International sales were up 5% for the six months to February 28 following the “successful launch” of zonal pricing in global markets including Australia, the US, France, Germany, Italy and Spain in October.

Robertson told Drapers: “The momentum is building; you can see that in today’s results. We can’t do it all in one go but the market has responded well so we will be investing more than we originally planned to, so we will be bringing forward our expectations to 18 months rather than two years.”

He would not say how much extra money is being invested into the pricing scheme.

The zonal pricing investment so far caused pre-tax profits at Asos to drop 10% to £18m during the six months and retail gross margin was down 270 basis points to 46.8%.

Russia has been hit hard by currency fluctuations over the last 12 months and is in negative growth for the retailer- the first country to do so in its 15 year history. Sales dropped from 100% growth last year to -40% in 2015. However Robertson has no plans to exit the country, as the business has “no infrastructure there”.

Robertson also said consumer uncertainty over the upcoming general election on May 7 would have “no effect” on the business.
“It might affect shoppers if they are buying a house but for a 20 something buying a dress for Friday night in won’t have any effect. During the economic downturn we were growing at a huge rate so the economy in the UK isn’t a work. In Europe however the high youth unemployment rates in Spain and Italy may mean that we are not realising our full potential in those markets,” he added.

Asos will be one of the first business to launch an app for the Apple watch when it is released on the market at the end of the month.

Retail sales at the etailer grew 14% to £536.4m, driven by a 27% rise in the UK.

Robertson stressed that full-year profit and margin forecast is in line with market expectations.

@jillgeoghegan

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