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Online fashion firm ASOS shines in consumer gloom

Posted: Wednesday, July 2, 2008, 10:09 (BST)
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Profit before tax and one-off items leapt 176 percent to 8.25 million pounds in the year to March 31 on a 90 percent increase in revenues to 81 million.

Sales in the 13 weeks to June 27 were up 95 percent.

Robertson noted particularly strong demand for clothes with African prints and a nautical Riviera feel, as well as the sort of lace dresses sported by socialite Peaches Geldof, and the style of gladiator sandals worn by Sarah Jessica Parker in the movie "Sex and the City".

He also forecast a small upgrade to analysts' consensus profit forecast for the current financial year, which he said was about 12 million pounds.

Kaupthing analysts said they expected the consensus to increase to around 13 million pounds, while Seymour Pierce's Freddie George raised his forecast to 14 million.

However, George also cut his investment rating on ASOS shares to "hold" from "buy," saying the good news was already priced into the stock and that it was likely to face stiffer competition from store groups expanding their online offerings.

ASOS shares dipped as much as 3.4 percent in early trade, but by 12:50 p.m. had recovered to trade up 2.5 percent at 335 pence, valuing the firm at about 234 million pounds.

The stock has almost tripled in value over the past 9 months and outperformed the UK general retailers index by 450 percent over the same period.

ASOS did not, as some analysts had suggested, pay a maiden dividend. Instead it plans to increase capital spending to about 7.5 million pounds this financial year, from 4.5 million the year before, on improving warehouses and back office systems.

The firm will also expand its petites range from 20 lines to about 200 this fiscal year, and will introduce size 20 clothes into its own-label range, as well as a full maternity offering.

Improvements to the website will include a catwalk for premium men's clothes and 360-degree viewing of shoes and bags.



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