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Asos reveals a good Christmas, but could it have been better?

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Shares for pureplay fashion retailer Asos rose as high as 9% today after the British e-tailer posted a festive season sales boost driven by a rise in UK demand.

Investor concerns were dispelled following a continuous profit warnings, and a fire in the distribution centre, last year. In a trading update this morning, Asos said that retail sales in the six weeks to January 9 increased 15%, helped by a 27% jump in home market sales.

For the fashion commerce business, international sales account for just over half of total revenue (51%), and these were up 5% during the Christmas holiday period. “Trading over the last six weeks was in line with expectations, with growth accelerating in the first quarter as anticipated,” said Nick Robertson, Chief Executive at Asos.

While UK sales remained strong, Asos may have performed better had they prepared better, believes Dan Wagner, Retail Expert and CEO of Powa Technologies who said:

“Known as a retailer who provides good value and fast delivery, Asos struggled to compete when other retailers aligned their strategy towards extensive price cuts and click-and-collect deliveries.

Ultimately, Asos required another way to differentiate themselves in a period when most retailers adopted similar strategies. There should have been a greater focus on extending its eCommerce strategy to mobile and allowing customers more freedom in how they purchase their items with streamlined checkout processes and one-click buying. These additions to its eCommerce strategy could have allowed greater numbers of consumers to visit its website and complete orders faster, without being tempted other offers from rival sites.”

Published on Tuesday 13 January by Veebs Sabharwal

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