ASOS shrugs off China slump

ASOS shrugs off China slump

Online fashion retailer ASOS has posted a double-digit hike in half-year profits, but revealed further losses from its ill-fated Chinese business.

The group hailed a "good start" to its financial year after a bumper festive season helped pre-tax profits surge 18% higher to £21.2m in the six months to February 29.

It was boosted by record sales over online discount days Black Friday and Cyber Monday in the run-up to Christmas, which saw it handle up to nine orders a second.

This helped UK retail sales lift by a quarter to £289.5m, while international sales were 24% higher at £359.1m with exchange rates stripped out.

But the results showed ASOS counted the cost of its failed Chinese venture, with interim losses of £2.7m, following losses of £3.1m a year earlier.

ASOS,  which stands for As Seen On Screen,  said it was pulling the plug on its Chinese arm last week,  with the group to trade via rather than a local website.

The group's half-year figures also showed ASOS expects to suffer around another £1m in losses from the China venture  before trading ends later this year, while last week it said it would take a £10m hit from the closure.

ASOS will continue to push its other overseas operations, with international sales now accounting for more than half of group turnover.

It said US retail sales rose by 34% with exchange rate effects stripped out, while sales grew by 31% on a constant currency basis across the EU.

Chief executive Nick Beighton, who took over from founder Nick Robertson  last year , said the profits rise showed "improving momentum" in the business.

He added: "We've had a good start to the year and I'm pleased with progress on a number of fronts."

The firm, which targets fashion-conscious 20-somethings, said nearly half of all orders were made through its mobile app, with 3.2 million app downloads in the first six months of  the year.

Shares leapt 6% higher as the half-year results beat city expectations.