Asos Plans New China Entry as First-Half Profit Gains 19 Percent
Asos Plc (ASC), the U.K.’s largest online-only fashion retailer, said it plans to start a new website in China next financial year after first-half profit climbed 19 percent, meeting analysts’ expectations.
Profit before tax rose to 25.7 million pounds ($40 million) in the six months through February, the London-based retailer said in a statement today. That matched the average estimate of six analysts compiled by Bloomberg.
Asos, whose shares have doubled in value in the last 12 months, is outpacing rivals with its lower-priced own-brand offering in the U.K. and a focus on new fashion content like its FashionFinder micro-site in markets like France, Germany and the U.S. The retailer said it will start in Russia next month and in China in the new financial year after an internal review found a new operating model was necessary for the world’s most populous country.
“Momentum is strong, and we remain positive in our outlook for 2012/13” Chief Executive Officer Nick Robertson said in the statement.
The Chinese business will differ from the company’s other international models as it will have its own standalone technology platform, local third-party distribution center, and a larger in-country team, costing up to 6 million pounds a year for the first two years, according to the statement. The retailer reiterated its target of 1 billion pounds of sales by 2015.
The shares rose 3 percent to 3,076 pence in London trading yesterday. That boosted this year’s gain to 14 percent.
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