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‘We’ll continue to absorb price inflation,' says Asos boss

Asos will continue to take the hit on the impact of the weakened pound and hold prices steady, chief executive Nick Beighton has said.

Despite increased inflation in the market, Beighton said it would not raise prices for shoppers: “We have made a big price investment and we are sucking up that inflation.”

He continued: “We have held prices as planned. Overall the weak pound is a currency benefit to Asos as 60% of our sales are international. We held prices on our own label and we honoured any changes made by brands to their prices.”

Beighton said the firm’s investment in price was key to its growth.

For the four months to 30 June total sales at the etailer jumped by 32% to £660m. UK sales were up 16% year on year to £234.6m while international sales rose by 42% to £425.5m during the period.

The chief executive said he saw no evidence of slowing consumer confidence in the UK.

“We are not seeing any [slowdown]. We’ve had an increase in the frequency of purchases, the average basket size and conversion has all increased in the UK. Our growth is central to the continual shift from traditional legacy channels to online, which is now being driven by mobile.”

A total of 80% of all traffic on Asos now comes from mobile in the UK and it makes up 70% worldwide.

During the four-month period, Asos launched 5,000 new products every week.

Beighton said “standout performers” were activewear and trainers across men’s and womenswear; occasionwear and dresses in womenswear and the Big and Tall range for men, which he said was “gaining credibility”.

In relation to the potential threat of the new service from Amazon Prime Wardrobe, which allows shoppers to try on products at home before buying them, Beighton remained unfazed: “Our mission is to improve product and experience. We have discussed doing something like the Prime Wardrobe model in the past but for now our model is working so there are no plans to roll out something similar.

“We take inspiration from listening to our customers, experimenting and trying new things. We focus on 20-something fashion and that focus is a strength. That being said we do look at what Amazon and other retailers are doing to see if there is anything we can learn but we have been using the subscription model for a long time, it’s nothing new to us.”

As a result of its recent performance, full-year sales growth at Asos is expected to be at the upper end of the 30% to 35% range.

Full-year profit before tax is expected to be in line with market consensus at £79.4m.

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