ASOS’ fashion crown remains firmly in place despite further waves of COVID-19, says GlobalData

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Following today’s release of ASOS figures for H1 FY2020/21; Chloe Collins, senior retail analyst at GlobalData, a leading data and analytics company, offers her view: “ASOS continues to dominate the young online fashion market, with its lead only strengthened further during COVID-19 thanks to its unrivalled agility, range and fulfilment. Following a stellar FY2019/20, in which group retail sales climbed by 19.3%, the first half of FY2020/21 saw further acceleration, with sales growing by £368.5m to reach over £1.9bn. Its home market, the UK, shone the brightest, achieving 38.7% retail sales growth as domestic shoppers have become accustomed to ASOS’ reliable delivery proposition and leading brands, with casualwear, activewear and face & body categories leading the charge. The lower returns rates associated with these lockdown products, which are less dependent on fit, helped operating profit soar by 235.8%. However ASOS will be mindful of a return to pre COVID-19 returns rates in the second half of the year, as spend for occasionwear and going out styles rebounds.

“ASOS also benefited from transferred spend on former Arcadia brands – Topshop, Topman, Miss Selfridge and HIIT – which it acquired in January 2021 and has fully integrated into its platform. With the US currently boasting the highest growth rates for these brands, the acquisition has already shown that ASOS can succeed in elevating international awareness in a way that Arcadia could not. With more products still to launch as ASOS aims to reach 10,000 options across all four brands, alongside plans to add more inclusive sizing such as a Curve range for Topshop and Tall for Miss Selfridge in the future, as well as the launch of a Nordstrom partnership, ASOS is ensuring that the brands have a strong chance of revival.

“Though there is light at the end of the COVID-19 tunnel and ASOS will be ready for increased demand for its more fashion-forward, dressy designs, shoppers’ desire for more comfortable and versatile clothing is expected to be a long-term switch. Therefore, it should ensure that these styles retain a high presence on its social media platforms and that it showcases how items can be styled to suit multiple end uses. Particular focus on building US awareness of its casualwear offer is essential also, with the market’s growth in H1 much more muted than the UK and Europe, as US shoppers still primarily view the retailer as an occasionwear destination.”

Richard Lim, CEO, Retail Economics, said: “These are mightily impressive results given the overall pressure rippling through the apparel market. Fewer nights out, canceled holidays and more working from home have decimated demand for new outfits but the retailer continued to power ahead, leveraging the opportunity that the online shift has presented. 

“The acquisition of Topshop appears to have gone very smoothly, presenting a chance to impress new customers with an online proposition that is way ahead of the curve. Bolting on the Topshop brand will enhance its appeal to a new segment of online shoppers as the retailer connects with new audiences and continues to grow market share. The pace of the integration was astonishing, relaunching the brand within three weeks of its acquisition showing the kind of agility that other retailers aspire to. 

“Overall, the retail industry is entering a period of consolidation as brands benefiting from the digital shift become stronger and look to acquire weaker players in the market. Further acquisitions should be expected.”