ASOS confident in power of youth

Online clothing firm ASOS today pinned its hopes on the buying power of youngsters to carry it through the gloom on the high street.

The retailer, which sells clothes in the style of celebrities such as Kate Moss and Sienna Miller, said younger shoppers were less likely to change their habits during tough times.

Chief executive Nick Robertson said: “Young fashion appears to be more resilient to macro-economic pressures.”

Many high-street operators have been hard hit by what was described by the British Retail Consortium earlier this week as a “consumer-led recession”.

ASOS, which stands for As Seen On Screen, said in a pre-close trading statement that it was confident about its prospects for the current financial year.

The firm issued a profits warning earlier this year after distribution problems left it with a glut of excess stock that forced it to heavily discount items. It said today that stock levels were 30% to 40% lower than before Christmas, and that it expected to move to a new warehouse in August.

Profits were in line with market expectations after the statement in March that they would be between £1.1m (€1.6m) and £1.2m (€1.8m).

Annual sales were expected to have increased by 79% to £13.4m (€20m) after new departments were opened during the year.

ASOS also said its website attracted a million users in March for the first time, with more than 580,000 people currently registered.

Richard Ratner, retail analyst at stockbroker Seymour Pierce, said: “The management sees, as we do, a resilient young fashion market, together with the fact that it should enjoy a full year of sales from departments added in the last financial year.”

He left his forecast for the current financial year unchanged at £1.05m (€1.6m), mainly due to the risk attached to the warehouse move.

“Should this go to plan, then there should be considerable room for upgrades,” he added.

The company is due to post its results for the year to March 31 next month.