A surge in sales of makeup and jogging bottoms over the Christmas period has boosted sales at the online fashion retailer Asos, which is expecting to make bigger full-year profits as a result.
As Christmas parties were cancelled because of the Covid-19 pandemic and many office workers now work from home, shoppers splashed out on comfortable leisure wear including tracksuit bottoms, rather than party frocks.
Health and beauty products – “makeup, lotions and potions of all sorts” – were also popular, said Nick Beighton, the Asos chief executive, as customers focus more on their wellbeing and improving their looks for video calls. The number of regular shoppers at the online firm rose by more than 1 million to 24.5 million.
UK sales rose by 36% over the last four months of 2020, as Asos benefited from a surge in online shopping since the coronavirus outbreak last March, while Covid-19 restrictions forced high street rivals to shut non-essential retail stores. Total retail sales worldwide advanced 23%, including 18% growth in the EU and 13% in the US.
Asos also benefited as customers returned fewer items, due to tighter restrictions across the UK, and the November lockdown in England.
With England and Scotland entering new lockdowns in the new year, and restrictions likely to last until at least mid-February, Asos expects a Covid boost to pre-tax profits of at least £40m in its first half.
As a result, it said pre-tax profits would hit the top end of City forecasts for the year to 31 August 2021, which range from £115m to £170m. In the previous year, profits more than quadrupled to £142.1m.
Even so, Beighton highlighted an uncertain outlook. “Looking forward, given the uncertainty associated with the virus and the impact on customers’ lives, our cautious outlook for the second half of the year remains unchanged.”
Asos also said that Brexit “country of origin” rules, which cover the shipment of products between the UK and the EU, would result in tariff costs of £15m.
It announced earlier this week it would build a £90m distribution centre in Lichfield, Staffordshire that will handle parcels for its online clothing and beauty business and hire 2,000 people over the next three years.
