ASOS, the online fashion firm, will be looked to for any signs of a Brexit blow to retail sales amid concerns that shoppers took a cautious approach to spending in the run-up to the EU referendum.
\r\nThe group booked a double-digit hike in half-year profits in April, after a bumper festive season helped UK retail sales lift by a quarter to £289.5 million, while international sales were 24% higher at £359.1 million.\r\n\r\nASOS, which stands for As Seen On Screen, is expected to continue its strong run, but could see sales pegged back by a slip in consumer spending in the wake of Britain’s vote to leave the European Union.\r\n\r\nRetail sales saw lacklustre growth in June, with a balance of +5% of retailers reporting volumes up on this time last year, from +7% in May, according to the pre-referendum Distributive Trades Survey from the CBI.\r\n\r\nHowever, some analysts are predicting ASOS to capitalise on the fall in the value of the pound, as 60% of its customers and sales come from overseas. Sterling slumped below $1.28 for the first time since 1985 at one stage on Wednesday and also dropped as low as €1.16.\r\n\r\nPeel Hunt analyst Jonathan Pritchard said: “The pound gives ASOS an opportunity to lower global prices.\r\n\r\n”This will be done at pace, and management’s expectation is that this will generate a ‘halo’ effect to drive higher sales in the future.”\r\n\r\nThe group’s managers are also eyeing hefty sales targets of £1 billion in the UK, £1 billion in Europe and £700 million the United States.\r\n\r\nIt comes after the retailer announced in April that it was ditching its Chinese arm, with its half-year results pointing to £1 million in losses from the venture. It previously said it would take a £10 million hit from the closure of the operation.\r\n\r\n
