Shares in Asos jumped a stylish 16.5% this morning, as the online retailer updated on its second quarter. The pureplay is celebrating a return to growth overseas and a better-than-expected rise in group sales.
Overall sales increased 19% to £290.1m, with the fashion destination attributing success to price cuts and the introduction of different pricing in different territories.
Following a challenging trading continues after fire in its distribution centre mid-2014, CEO Nick Robertson said today that the company is back on track as international sales increased 12% to £163.5m, an stark improvement on the 2% decline seen in the previous quarter.
After struggling to adjust prices for different territories, Asos has now introduced “zonal pricing” in the US, France, Germany, Italy and Spain. “Get your prices right and the rest follows,” said Robertson.
A report by private investment firm CSS Partner LLP, recently argued that the biggest reason for Asos’s success has been its digital platform, which has always been ahead of the curve. Its key tools, from the iPhone and android app, to its Facebook shop, mobile site and Fashion Finder tool, are not just extensions of brand Asos, they add to the online retail experience. Wherever Asos customers are, the fashion e-tailer is accessible.
The company is also savvy in capturing and analysing data from a variety of social media sites which it uses to predict buying trends and demand. This in turn, is fed back into its supply chain, creating an efficient operation which provides strong customer satisfaction.
Then there’s the brand’s own print magazine which continued to drive sales. The publication is sent to over 450,000 subscribers monthly and costs are mitigated by advertising revenue from brands already featured on the Asos site.
Shares in Asos were up 16.5% to £38.20 in early trading, pushing the stock to its highest level since May 2014.