ONLINE fashion retailer Asos yesterday reported a double whammy of a slowdown in sales growth, coupled with a drop in prices due to the reduction in spending power of its teenage customers.
In the company’s fourth trading quarter in the three months to 31 March UK sales nudged up by only four per cent year-on-year.
That contrasted with third quarter growth which was ten per cent and the slowdown took its toll on the company’s share price which dived by more than eight per cent after the trading update.
In its full trading year UK sales rose seven per cent to £197.9m but in the previous year they soared by 25 per cent. International sales rose 63 per cent to £77m during the fourth quarter and a 103 per cent jump over the full year to £283.7m,
The firm, whose business model is to sell designer clothes and accessories at knockdown prices online, said its fourth quarter had been hit by tough comparatives as in the equivalent period last year it introduced free global shipping.
Asos chief executive Nick Robertson said: “The comparatives are tough but we are still growing fast.”
The company’s customers are young and growing youth unemployment has taken its toll on retailers.
Robertson said: “It’s a tough market. We have cut prices by at least two per cent to reflect that. The price of cotton has also dropped which has helped.” He said margins were strong, adding: “We are doing very well internationally, especially in Australia where we are beating our competition by a country mile.”