ASOS to step up investment as profit jumps 23 pct

Reuters

LONDON (Reuters) - British online fashion retailer ASOS (LSE:ASC) plans to step up investment to support its rapid sales growth, the firm said on Wednesday, as it met forecasts with a 23 percent rise in full-year profit.

The group, whose celebrity fans include U.S. First Lady Michelle Obama and pop singer Rita Ora, said it would increase investment in people, technology, logistics and marketing to about 55 million pounds in each of the next two years.

It invested 33 million pounds in the 2012-13 year.

ASOS, which sells over 65,000 branded and own-label products, shipped for free to 237 countries, has been the big success story in British retailing in recent years, with its fast-changing fashions snapped up by Internet-savvy twentysomethings.

Its shares, which have more than doubled over the past year, closed at 5,413 pence on Tuesday, valuing the business at 4.45 billion pounds.

Last month ASOS said it was on track to hit its 1 billion pounds annual sales target one year ahead of schedule in the 2013-14 financial year.

It said on Wednesday this year had started positively.

ASOS currently trades from eight local language websites: Britain, the United States, France, Germany, Spain, Italy, Australia and Russia, and will soon launch in China.

The company made a pre-tax profit of 54.7 million pounds in the year to August 31.

That compares with analysts' consensus forecast of 54 million pounds and 44.5 million pounds made in the 2011-12 year.

Revenue, reported last month, rose 39 percent to 769.4 million pounds, with UK retail sales up 34 percent and international retail sales up 44 percent, the latter representing 63 percent of the total.

Retail gross margin increased 100 basis points versus the year before.

ASOS is not paying a dividend, as has been the case since it listed in 2001.

(Reporting by James Davey; Editing by Pravin Char)

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