ASOS sees shares rise to record levels thanks to e-commerce

Friday, April 15, 2011 - 10:51 by Mike Price

Fashion retailer ASOS reported that its shares had increased to their highest ever value this week, marking a stark contrast between its success online and the string of high street chains which are issuing profit warnings as sales slump.

The rise and rise of ASOS is being seen as proof that consumers in the UK are not necessarily reining in their spending as a result of government cuts and VAT rises but are rather redistributing their habits and turning to safe shopping online, rather than the high street.

In the first three months of 2011, ASOS saw a 24 per cent increase in sales thanks to consumers heading online and plowing their cash into its broad range of fashion labels and accessories. This resulted in a 14 per cent increase in the value of its shares, according to the Daily Mail.

Industry analyst, Ramona Tipnis, said that the strong performance of ASOS was showing that there are still a large number of young consumers with disposable income who are willing to spend their cash on fashionable items even in these times of economic uncertainty.

Tipnis warned that the main reason that ASOS was seeing continued success while high street staples like HMV and Dixons were losing money, is because the former has relevant products at great prices which go hand in hand with the convenience and security of safe shopping online.

ASOS is 11 years old and it was created in order to let young women copy the fashion styles of major celebrities without having to spend the thousands of pounds necessary to get the killer looks, hence the 'As Seen on Screen' moniker from which its name is derived. With lots of investment and a valuation of one and a half billion pounds, it looks likely to remain a key player in the online fashion market.