Celebrity obsession boosts Asos results

Asos achieved record growth this year thanks to the British public's continued obsession with celebrity. Sales rose to £18 million, up from £13.5 million, for the year ended 31 March. Pre-tax profits soared 61 percent to £1.42 million. Chief executive Nick Roberston said, "The hot celebrities right now are Mischa Barton and Peaches Geldof, everyone wants to look like them." Robertson said that thanks to the range of celebrity-inspired fashions, sales climbed 39 percent. This was despite the fire that damaged the company's warehouse earlier this year. He also told the FT that Asos was building its own in-house design team to keep up with the ever-changing styles and trends which its target audience of "internet savvy 18- to-34 year olds" adheres to. "The Ibiza look is it at the moment, very bright colours, platforms, short skirts, sandals, and big sunglasses - we need to have them now," he said.

Robertson said he expected sales to "hit the £100 million mark" in the next three years, but also said that investments in infrastructure would affect earnings growth. "Bottom-line growth will accelerate once the operational gearing kicks in but not this year or next," he said. According to the FT, Asos's success has forced many British fashion retailers to take a closer look at their online businesses. Ebay has just announced its plan to launch a new online service in the UK geared towards small and medium-sized retailers, especially fashion companies. The new site will be called Ebay Express and will cater to retailers "more comfortable with traditional fixed-price retailing of new goods."

Despite Asos's spectacular results, the FT warned readers that "the business comes with risks. It burns cash, faces a high level of operational risk and has shown weakness in its back office operations."