×
Published
Nov 10, 2021
Reading time
2 minutes
Share
Download
Download the article
Print
Click here to print
Text size
aA+ aA-

ASOS expects "significant" future growth, own-brands are key

Published
Nov 10, 2021

ASOS’s share price has been falling following a slowdown in its rapid growth, a profit warning and the departure of its CEO, and with a capital markets day hoping to reverse this situation on Wednesday, the company has been talking up its future growth prospects.


ASOS



Ahead of the event that's targeted at analysts and investors, the online fashion retail giant said it has plans to significantly increase its sales and profitability in the medium and long term.

It said it sees “significan”t further growth potential with a Total Addressable Market (TAM) of £430 billion by 2030 in the UK, US, Europe and core RoW territories.

The business believes it has closed the technology deficit” that affected it in the past and built its global logistics infrastructure, so it “now has the foundations in place to support long-term global growth”. And it will “complement its unique offer of own and Partner Brands and leading customer proposition with the rollout of its Partner Fulfils model”.

Those own-brands will be key globally. Enhanced by the recent purchase of the Topshop brands, it said 60% of new customers are now “putting an ASOS brand in their basket”. It aims to expand the reach of its brands by “continuing to relentlessly improve its fashion credentials”.

And it will “further improve its customer offer through better availability across partner brands, improved curation and an extended product choice in new categories such as Sportswear and Face + Body”.

It will also be more focused with its international expansion”. It plans to “leverage the global success of its own-brand proposition to accelerate growth in the EU and US by increasing the localisation of operations, experience and assortment, underpinned by a ramp up in marketing investment”.

Over the course of the next three to four years, it’s targeting £7 billion of sales, or compound annual growth of between 15% and 20%. This should come with an EBIT margin of at least 4%.

Key elements to achieving this include adding over £1 billion of revenue from own-brands; the rollout and expansion of Partner Fulfils to represent 5% of GMV, and continued growth in the UK business while doubling the size of ASOS in the US and EU.

And it said it’s confident that strong sales growth can be sustained over the long term and margins can be significantly enhanced in all territories”. Partner Fulfils will be a big part of this and “could represent up to 25% of GMV over the longer term”.

Copyright © 2022 FashionNetwork.com All rights reserved.