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Online fashion chain ASOS sees 'phenomenal' start to Primark tie-up

'Phenomenal' demand for Primark products after just one week were the icing on the cake for ASOS today: the online fashion retailer reported a huge sales surge that predated its new partnership with the discount clothes store.

ASOS has tapped into demand from value-seeking twenty-somethings for both branded and own-label products. The company - whose name stands for 'as seen on screen' - particularly targets young women aiming to emulate the designer looks of celebrities such as Nicole Scherzinger and Cara Delevingne.

Britain's traditional high street shops have suffered as consumers feel the pinch from squeezed incomes, but ASOS's performance suggests online retailers may be faring far better - though the strongest growth came from markets abroad including the US and Australia.

Looking good: Having begun a limited trial of Primark fashion items last week - marking the clothing chain's first foray online - business has rocketed through the ASOS site

It was also helped in the UK by the coldest spring in 50 years, which discouraged shoppers from leaving their homes.

And having begun a limited trial of Primark fashion items last week - marking the clothing chain's first foray online - business has rocketed further.

'The response has been phenomenal,' ASOS chief executive Nick Robertson said.

'Clearly there's a very high demand for Primark products among our customer group; and with the internet increasingly being the preferred channel of purchase, those customers are missing out if Primark isn't online.'

  More... High Street revival on the horizon as consumers start to 'loosen their belts' Smart moves from women's fashion retailer Hobbs as sales jump

ASOS reported a remarkable 45 per cent rise in sales to £194million in the three months to May 31 - just before the Primark trial began - compared with the same period in 1012, helped by price reductions on own-brand products which boosted demand.

This rise was ahead of a forecasts for around a 42 per cent increase, and the already-impressive 37 per cent rise in the second quarter. As a result, ASOS shot up more than 4 per cent early this morning. They currently stand up 129p (3.2 per cent) at 4,110.

Copy cats: ASOS has been very successful in targeting young women aiming to emulate the designer looks of celebrities such as Cara Delevingne (left) and Nicole Scherzinger

And while UK sales jumped 39 per cent to £64million, international sales were up a mighty 48 per cent to £129million - driven by stronger growth in countries where it has dedicated websites such as the United States, France, Germany and Australia.

It means the company now makes 67 per cent of retail sales overseas, and it has unveiled plans to build on this success with the launch of a Chinese-language website in October.

Consumers are expected to 'loosen their belts' this year as changes to the personal allowance for income tax mean many people will have an extra £300 to spend, the Ernst & Young ITEM Club said on Monday.

Already there are signs the housing market is recovering too, with the Help to Buy and Funding for Lending schemes driving mortgage rates down and easing monthly payments slightly.

The knock-on effect should see a high street revival, with consumer spending is set to grow by 1.2 per cent this year, and by 2015 it will have returned to its pre-financial crisis peak.

Clothing and footwear is also expected to perform relatively strongly over the next few years, although growth will be well below that in the decade before the financial crisis, the report said - although it also cautioned that consumers will still feel ‘bruised’ by the experience of several tough years on household budgets, and retailers should not expect them to spend quite as freely as they did before the economic downturn.

Despite all this, ASOS expects full-year results to be in line with expectations. The consensus forecast in a Reuters poll of 19 analysts was for a full-year pretax profit of £53million.




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