The online fashion specialist Asos more than quadrupled profits as its mainly 20-something shoppers snapped up comfy casual wear and skincare products during lockdown.
It added a further 3.1 million shoppers to its active customer base, taking the total to 23.4 million, and said it had made a “solid” start to the year. However, the group remains cautious on outlook because of the impact of the coronavirus pandemic on its young customers and the potential impact of Brexit.
“The normal pattern of social events is not going to resume in the short term so whilst we have confidence in our ability to continue growing our market share globally, we are cognisant of the economic impact this crisis is having on our 20-something customers and the pressure on their disposable incomes,” the company said.
Nick Beighton, the chief executive, added: “Life for our 20-something customers is unlikely to return to normal for quite some time.”
Sales rose by 19% to £3.3bn, the top end of expectations, in the year to 31 August and the company said the increasing popularity of beauty products and less fitted clothing, such as jogging pants and sweatshirts, had led to fewer unwanted items being returned, helping to boost profits by £45m.
Asos also cut costs, including on marketing, and gained efficiencies from more automation at its European warehouse, leading to a 329% rise in annual pretax profits to £142.1m. It said it was investing £5m on social distancing safety measures at its warehouse after criticisms of the treatment of workers when the coronavirus crisis hit the UK.
Sales in the UK rose 18% and by more than 20% in the US and EU during the year, driven by a 50% rise in sales of sportswear.
The company is introducing a lower-priced own label line, AsYou, predicting a continued squeeze on the finances of its shoppers.
Online fashion retailers initially reported a slump in demand during the coronavirus crisis as shoppers stayed home and dressing up events were cancelled.
But after high street stores closed at the end of March, shoppers switched to buying online and Asos said it stocked more casual clothing, fewer dresses and less going-out gear to adapt its range to lockdown life.