Asos profits hit by IT and warehouse spending

Online fashion retailer Asos today said its first-half profits fell by more than a fifth as heavy investment in warehousing and IT systems offset a jump in sales.

The firm, which targets shoppers looking to emulate celebrity styles, posted a pre-tax profit of £20.1 million for the six months to 28 February, down from £25.7m a year earlier, despite revenues surging 34 per cent to £481.7m.

Chief executive Nick Robertson said Asos is planning £68m in capital spending for the full year in a bid to couple its sales capacity. The investment will go into its IT platform and warehouses in the UK and overseas.

He added: “This increased pace of investment has reduced our profitability in the period, but will deliver significantly increased capacity as well as efficiencies in the longer term.

“Asos is not and has never been about the short-term; the scale of the global opportunity remains as exciting as ever and we are investing for the many opportunities ahead.”

During the first half, UK retail sales grew 32 per cent to £182m. That compares with international sales that rose 35 per cent to £243m.