Retail sales surged by 40% at Asos as the fast fashion retailer reported another strong performance for the year ended 31 August 2013. Profit before tax and exceptional items were up 23% to £54.7m but it was in the international market where its success came with 63% of total retail sales coming from overseas. In a statement, the company said it will launch in China soon after launching a website in Russia this May.
Founded in 2000, Asos is one of the biggest success stories of British retailing in recent years, selling over 65,000 branded and own-label products shipped for free to 237 countries. Nick Robertson, CEO, Asos commented: “During the year we continued to make progress towards our goal of being the world’s number one fashion destination for 20-somethings. We reached the milestone of 7 million active customers worldwide, following significant investment in our product offer, delivery options, customer experience and marketing.”
During the year Asos added new third party brands including New Look, Monki, Jack Wills and Pull & Bear. Asos, who set up offices in the EuraTechnologies tech start-up hub in Lille, France a year ago, revealed that they were signing up a customer every minute at their busiest times. Gaele Wuilmet, who heads up its French office said one of the reasons the retailer decided to move to Lille was due to convenient business links with London and Paris. “Lille is the capital of e-commerce and fast fashion,” she declared during a morning briefing at Asos France yesterday.
The company announced plans on Wednesday to step up investment in support of its rapid sales growth, saying it would increase spending on people, technology, logistics and marketing to about £55m in each of the next two years. It invested £33m in 2012-13.
Shares in Asos have more than doubled in the past year, but slipped 5.1pc in early trading on Wednesday to £52.03.
What the difference a week makes!? Last week, it felt the end was extremely close for the High Street however, this week it’s all optimistic, even Jeremy Clark of Top Gear had his thoughts on tonight’s episode! Amid the depressing economic statistics and the elaborate media publications, numerous retailers are defying the downturn, with remarkable growth. Yay!
There is no doubt in anyone’s minds (inc Jeremy Clark’s) that recent events have been a particularly turbulent time for the British retailer industry. More than 10,300 jobs and almost 1,000 stores are at risk from just three businesses (HMV, Jessops & Blockbusters) falling into administration. Online shopping, supermarkets dominance and the pressure on consumer spending has taken a lot of the blame for the recent downfall of physical stores poor performances. But publicising the coming demise of the high street is a dangerous wee thing for us to do! For a start, more than half of the shops involved in the recent retail administrations are not even on the high street.
However, away from the death of three big chains there is a significant list of figures from January that tell a different story to the job losses and store closures: “9pc is the rise in like-for-like sales over the Christmas period for Primark, a retailer that has no online presence; 75pc is the proportion of Argos’s online sales that are now collected by customers in its high street shops; and 400 is the number of new coffee shops that Lavazza wants to open in the UK”. Existing retail chaos doesn’t prove an imminent high street apocalypse – rather, it filters out the bad ‘yins’ and paves the way for the modern offline retail sector, living alongside the online marketplace.
Multi-channel strategies and clever positioning in market niches have meant that many high-street retailers are still experiencing positive growth. Retailers demonstrating this:
1. Dune
CAGR (average compound annual growth rate in turnover over a four-year period): 60.12 per cent
Latest turnover: £130.9m
Three success strategies leap out: price, multi-channel strategy, and niche. Dune, with its 215 stores and additional online/mobile strategy, focuses on middle-class men and women, and builds on its strong brand recognition: the name is synonymous with affordable, good value footwear.
2. Poundworld
CAGR: 40.85 per cent
Latest turnover: £132.9m
Poundworld Retail’s turnover of over £130m is on an entirely different level from most other retailers. The Yorkshire-based company was launched in 2004 after rebranding from Everything’s a £1. Amazingly, the business is still growing at more than 40 per cent per annum. It has grown to more than 180 stores nationwide, and plans to open a further 200 in the next five years. The Poundworld empire is soaring amid economic turbulence: consumers are shopping for bargains even more than usual, so cheap products can deliver as much (if not more) profit than luxury goods. Poundworld’s relentless growth shows that value for money is still the route to success.
3. Crew Clothing
CAGR: 17.74 per cent
Latest turnover: £40.7m
A less risky business – with over £40m turnover – is Crew Clothing, which combines its 72-strong stores presence with online, mobile, and catalogue retail. Groups like Debenhams and John Lewis performed well in 2012 with noticeable rising sales (LFL sales rose by 3.3 per cent and 9.2 per cent respectively between March and September). This can be accredited to a focus on online ordering, expanding international presence and launching android phone apps.
The fastest growing high-street retailers are niche-carvers, multi-channel strategists, and go-to addresses for affordable goods. At the same time, they are very diverse. The only thing the three business on this list actually have in common is growth. Store numbers range from a single one to hundreds across the country; turnover from just over £200,000 to hundreds of millions. Business growth is very much present across the spectrum, you just need to have the right strategy in place.
One successful entrepreneur and retail-watcher, Jonathan Quin of World First, says: “The future of retail is destined to be shaped by convenience. If there’s no reason to visit the high street, people won’t go. Those that succeed will offer something that can’t easily be delivered by a courier, or those that offer an ‘experience’: Abercrombie and Fitch’s London store with its dancers and loud music is a good example of a shop that offers something that can’t be replicated online.” (Real Business has joined forces with data provider Jordans to find the fastest-growing retailers in the UK).
Until the next time…
Cheerio!
Wee Fashion Shower! 