New beats old as Asos breezes past M&S
Pureplay Asos has overtaken High Street giant Marks and Spencer’s market valuation. The fast fashion venture has been hot on the heels of its old school rival for several months. And on Friday its shares gained 2%, taking its market value to £4.89 billion. That makes it a more valuable business than M&S, now worth £4.88 billion, according to Reuters data.
Last year M&S announced it would shut 30 stores as part of an initiative to cut the amount of shopfloor space devoted to its clothing arm. Chief Executive, Steve Rowe and new Chairman, Archie Norman, are in the process of ramping up this project, the result of tough trading conditions on the High Street.
Asos, meanwhile, recently reported record full-year profit and sales. In the year to 31st August, pre-tax profit surged 145% to £80 million on revenue of £1.9 billion, up 33% on the previous year. “Our international performance was excellent, as we reinvested FX tailwinds and benefitted from our continually improving customer proposition. In a competitive UK market, we achieved strong full price performance whilst further increasing market share,” said CEO, Nick Beighton. “At the same time, we ramped up our investment in building the increasingly strong and differentiated Asos proposition. Our new agile technology platform is allowing us to accelerate our pace of innovation with great benefits for our customers, including new payment methods and additional language sites to come. The investments we are making will see us add 1,000 new heads and will lay the foundations for a c.60% increase in unit capacity and c.£4 billion of net sales. The new financial year shows continuing momentum in the business. The potential for our company remains huge. We are confident we are positioning Asos to be the world’s number one destination for fashion loving twentysomethings."