Asos profits grow after IT investment

Online retailer Asos has reported sales growth of 47% in the first half of this year. The company...

Online retailer Asos has reported sales growth of 47% in the first half of this year.

The company claims to have gone from strength to strength throughout the recession, despite much of the retail industry suffering.

UK sales grew by 33%, and international sales by 112% year on year. Operating profit increased by 14% in the half year to 30 September 2009, compared with the same period last year.

The company reported a good start to the second half of the year, with sales for the seven weeks to 15 November up 46%. It said it is "cautiously optimistic" for the coming Christmas period.

Asos invested fairly heavily in technology this year to support its fast growth, but said it does not expect to maintain this level of spending.

The company said, "The step change in these [head office running] costs was down to a significant investment in the IT function and infrastructure to support the core system replacement programme and the development of the website. We do not expect this rate of increase to be maintained for the remainder of the year."

The investment included the replacement and enhancement of the warehouse management system, the merchandise planning system and the datacentre.

Nick Robertson, chief executive of Asos, said of the company's good performance, "Fundamentally, the internet is the retail channel with the greatest potential and Asos is ideally situated to exploit it."

Asos said it concentrated on managing stock and costs tightly during the first half of 2009 while investing in new technology. Its new warehouse management system, which was rolled out in April, meant it could improve the number of delivery options and introduced free returns for all UK customers.

It introduced a further 12,700 products to its site, taking the total number to 34,000.

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