Asos chief executive Nick Robertson has defended the performance of the etailer after a “challenging” year, saying what doesn’t kill the business “can only make it stronger”.
Following three profit warnings this year, Asos announced this morning (October 21) that annual pre-tax profits dropped by 14% to £46.9m - just above analysts’ expectations.
However, Robertson insisted the business was still growing at a “better rate” than its etail peers, with sales increasing by 27% in the year to August 31 to £955.3m.
“We increased sales by over £200m this year; that’s bigger than Boohoo’s growth. Our growth in the UK was 35%. We outperformed our peers; we’re not worried about our competition in the UK.”
Robertson also revealed Asos will start selling products from UK online retailer Missguided and US retailer Abercrombie & Fitch in the coming months.
Asos has been hit by the strength of the sterling pound, which has damaged international sales growth. The first steps to stem the slow down - the introduction of zonal pricing - are already being trialled in three key regions.
Robertson declined to specify where or how quickly the scheme will be rolled out to all international territories.
He said the lowering of prices in the US will allow Asos to reintroduce brands to the local site. “We had to remove 80 brands from the US site as the price was so out of kilter with local prices.
“The US is a nice business but it needs zonal pricing so we can get more brands on the site and build up the stock in the Ohio warehouse. At the moment we are shipping from the UK.”
The business also hopes to add more names to its Chinese website, where it currently has 30 third party brands as well as own brand products.
“The Chinese consumer loves our stock and they will love the third party brands,” said Robertson. “It was a huge investment for us and it is growing at a slow steady pace.”
Asos invested £9m into the expansion into China this year, £3m more than it anticipated. Robertson attributed the extra costs to “onerous” restrictions the business underestimated, including dual handling costs and relabeling products.