Asos chief executive Nick Beighton discusses building brand relationships, the future of fashion technology, UK manufacturing and preserving the start-up company culture.
- Nick Beighton is the ideal fit for the top job at Asos
- Asos is always looking for new angles – it has just launched make-up
- The US is a key market in the etailer’s global expansion plans
- Reshoring is a priority for Asos, but Beighton has concerns
Anyone who has visited the Asos nerve centre that is Greater London House in Camden will know that the energy of the business is palpable as soon as you walk past the giant black cat statues guarding the grand entrance.
A pioneer in fast fashion, the pace of life at Asos headquarters is evident as swells of employees – most of whom are under 30 and decked out in the latest trends – bustle through the reception area into various meeting rooms and offices.
At the centre of this hive of energy is chief executive Nick Beighton. A trained accountant, he joined Asos in 2009 as CFO from nightclub owner The Deltic Group, where he was finance director, before taking over the top job in 2015.
However, dressed casually in a checked shirt and trainers, he dispels any stereotype of a finance stiff in a suit. Tall, sporting a summer glow and offering a firm handshake, he is warm, personable, and immediately gives the sense that he is very much a team player.
“We don’t do hierarchy,” he explains as he takes Drapers on an impromptu tour of one of the newly revamped, open-plan floors, where directors hot desk along with everyone else.
“I speak to every new starter. I do a presentation every other Tuesday evening where I tell them the things that are important about Asos. We celebrate doing things differently.”
For example, at Asos, no new starter joins on a Monday – “Everyone hates Mondays,” declares Beighton – and they are all asked to share something about themselves at the executive meeting on a Tuesday morning. And the executive team has to reciprocate.
“Things like that make Asos Asos,” he affirms.
The etailer is currently getting ready to welcome many more new starters – an additional 1,500 over the next three years, to be precise, across technology, marketing, content and retail – to add to its 3,400-strong team. To accommodate this, the business is in the process of expanding into an extra 40,000 sq ft of space, taking its office to 250,000 sq ft.
“The new auditorium [which is currently a court yard in the middle of the building] will allow us all to gather for town hall meetings. It’s about making the space work for us,” says Beighton.
The £40m investment in the building and the rate of expansion in personnel is just the tip of the iceberg at the etail giant, which generated annual turnover of £1.4bn in the year to 31 August 2016, and £722m in gross profit – both up 26% on 2015.
The next big focus for the business is conquering the beauty world.
“We’ve been selling beauty for a long time, but we’ve never really done it with authority. Around Christmas last year we looked at the business and said: right, what are customers telling us, what are we doing and what are we not doing and let’s get after it.”
Asos launched its first own-brand range of beauty and grooming products this month – Asos Make-Up is a 46-piece collection.
Given that 10% of male Asos shoppers said they have used make-up, Beighton reveals, the men’s and women’s buying teams for the category were amalgamated earlier this year.
“We looked at what other people were doing [in beauty and grooming] and it wasn’t that engaging, so we thought we should double down and focus. We want to go big on this, present it differently, beautifully and make it inspiring as it is an extension of the fashion experience.”
The business, known for its tech prowess, plans to give added value to shoppers with video make-up tutorials and an augmented reality [AR] option that shows consumers how colours and products will look on their skin using the camera on their smartphone.
“We’re in the testing phase at the moment, we need to figure out how customers want to use it, if it should be a standalone app or part of the Asos app. It is early days and needs to be done right,” Beighton asserts.
Other key areas of growth for Asos over the next 12 months include athleisure and plus-size menswear. In September 2016 Asos agreed to pay £20.2m to settle a trademark dispute with cycling brand Assos of Switzerland and German menswear retailer Anson’s Herrenhaus. The deal resulted in Asos stocking third-party performancewear for the first time in January. It is now gearing up to launch its first own-label sports collection this autumn.
“Think along the lines of Asos surf, Asos ski, Asos yoga, Asos running – everything that has an active element,” says Beighton.
“Activewear is being ramped up. Someone who enjoys fashion doesn’t stop enjoying it when they go for a run and some of our activewear may never see activity but they will look amazing regardless,” he laughs.
Details and prices of the range are yet to be disclosed.
We learn from our customers – sometimes not as quickly as we want, but we do learn
Asos introduced plus-size menswear for the first time for spring 17, as exclusively revealed by Drapers last August. Beighton says the category was born out of consumer demand and will continue to expand.
“We learn from our customers – sometimes not as quickly as we want, but we do learn from them. Guys were saying, ’I’d like to have that product but it doesn’t come in my size’, so we said, ‘Let’s try it.’
“We’re developing own-brand and a branded mix. We have a couple of bigger-guy brands but mostly we encourage our existing brands to extend their own ranges.”
This idea of partnership and working with brands is inherent to the Asos business model, says Beighton.
“It is a relationship that works both ways and it is super-important to nurture it. Working together is fundamental, it isn’t transactions, it is relationships, shared insight, information, inspiration and vice versa.
“Having those relationships mean we can develop lines together. We ask for one season of exclusivity on it then they can do what they want with it. We want brands to do well as we will then do well. We don’t want to dominate.”
Juls Dawson, owner of young fashion agency Just Consultancies, who has worked with Asos for 12 years, said the business “pushes boundaries”: “Asos buyers have the ability to research and gather information on a global scale, and the teams often guide suppliers to test new trends and product categories, which in turn pushes the brands’ collections into new areas.”
One of the founding principles of the business, established in 2000 as As Seen On Screen, is being first to market with trends, and Beighton told Drapers he wants to bolster the etailer’s speed to market by increasing the amount of product manufactured in the UK.
Asos currently sources 3% of its own-brand product from the UK, using two north London factories in Tottenham and Haringey. Beighton says he wants to treble production over the next five years to 10%.
However, he echoes the sentiment of departing New Look boss Anders Kristiansen, who told Drapers he wanted to bring volume production back to these shores, but complained that many UK factories fail to meet ethical regulations.
Beighton feels the government needs to do more: “One key aspect of our offer is first to trend, so that implies pace. I want to develop a much greater part of our business on short lead times and on-shore sourcing. We’ve got a lot of very competent UK factories and I’d love more, as nothing can be quicker than producing in the UK.
“Anders is right. Together we have put a lot of effort into Leicester to try and improve things there. People think poor sourcing conditions is a phenomenon [isolated to] outside the UK – it isn’t. We’d love it to be better. We can put some volume into it, but conditions have to be better, otherwise we won’t.”
Earlier this year Beighton and Kristiansen met with Leicester Council to discuss what changes need to be implemented, and a follow-up meeting is planned for October. Beighton is also working with the British Retail Consortium to get a meeting with retail minister Margot James and minister for the department of business, energy and industrial strategy Greg Clark.
“It makes sense to make in the UK. We’ll put volume behind it but we want [the government] to help us to do it. Other retailers will think about it [if we lead].”
Further afield, Asos is dominating global markets as well as its home territory. For the year to 31 August 2016, international sales jumped 25% year on year to £800m, making up 57% of total sales. The business ships to 240 countries and has eight local-language sites.
One of the strongest markets in terms of growth is the US, where sales increased by 50% to £179.2m in the year to August 2016. The US business will account for close to £300m this year.
To capitalise on the swelling appetite for Asos across the pond, the business is launching a new fulfilment centre, which will open next autumn. It is investing around $40m (£30.7m) in fitting out the unit, which is located in Union City, near Atlanta, Georgia.
The expansion follows a Brexit boost for international sales, explains Beighton.
“Over the last 12 months we have grown a lot [abroad] because of the weakening of the pound, so we wanted to make it really work for us. We needed more warehouse space to service the growth. We knew it was going to happen, but it has come a little bit quicker than we thought,” he admits.
“Our playbook is to inspire the customer, then give them the product, price and payment method, then amplify that with infrastructure and tech. The US warehouse is the natural extension of that. It gives us room to grow and it will take cut-off times for express delivery down from 3pm at the moment to hopefully 8pm, but definitely 6pm. That’s important to take advantage of peak shopping times.”
Beighton adds that another warehouse on the west coast will follow in the future, as a response to the “sheer scale” of the US.
In terms of the rest of the world, Beighton says a distribution centre in Asia may follow eventually, but it is not high on the priority list.
One area continually at the fore of the CEO’s mind is technology, where Asos constantly innovates. On the day of Drapers’ visit, the business launched its first visual search app – which Beighton insists on demonstrating. It gives consumers an easier search option for scrolling through its 85,000 products.
Beighton sees search evolving from visual to conversational, where shoppers will talk to apps and tell them what they want to see and purchase – undoubtedly an area of future development for the etail trailblazer.
This constant eye on what’s coming down the line is ingrained in Beighton’s character, a fact that his predecessor and former boss Nick Robertson attests to.
“We always knew we were getting more than a finance director when we took him on,” says Robertson. “He had good operational, technology and change management experience. Despite being the newest member of a very close team his passion for the business soon mirrored ours. From poacher to gamekeeper – finance to CEO – Nick has put the customer at the centre of his thinking. Reward customers and they reward you back: that’s been at the foundation of Asos’s thinking since day one and Nick totally gets it. It was the easiest decision to hand over the baton to him. He was absolutely the right man for the job and he will take Asos to even greater heights.”
Beighton echoes this notion of keeping the cornerstones of the business static in order to keep that start-up company culture: “The principles are similar just amplified. Our values and what it is to be a successful ’Asoser’ – authenticity, bravery, creativity – haven’t changed. We ask our staff to bring their best selves into work and have fun along the way as at the end of the day, we are only selling clothes.”