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Asos shares plunge as it steps up expansion plans | Asos shares plunge as it steps up expansion plans |
(about 7 hours later) | |
Shares in online fashion retailer Asos have closed more than 8% lower after it announced increased investment plans which it said would hit profit margins. | |
The firm said it would now spend £68m this year, up from its previous guidance of £55m, to increase warehouse space and improve its IT. | The firm said it would now spend £68m this year, up from its previous guidance of £55m, to increase warehouse space and improve its IT. |
Asos said this would boost its sales capacity to £2.5bn a year, £1bn higher than previous expectations. | Asos said this would boost its sales capacity to £2.5bn a year, £1bn higher than previous expectations. |
The firm also released sales figures that were below forecasts. | The firm also released sales figures that were below forecasts. |
In the first two months of 2014, total sales were up 26% from a year earlier, although this was below analysts' expectations of a 33% increase. | In the first two months of 2014, total sales were up 26% from a year earlier, although this was below analysts' expectations of a 33% increase. |
The retailer saw its strongest performance in the EU, where sales rose 57% in the period. UK sales rose by 21%, with US sales up 41%. | The retailer saw its strongest performance in the EU, where sales rose 57% in the period. UK sales rose by 21%, with US sales up 41%. |
The group, which focuses on fashion for men and women in their 20s, said it now had 8.2 million active customers, a rise of 36% year-on-year. | The group, which focuses on fashion for men and women in their 20s, said it now had 8.2 million active customers, a rise of 36% year-on-year. |
"It has been an exceptionally busy period of activity at Asos, with continued growth and accelerated investment," said founder and chief executive Nick Robertson. | "It has been an exceptionally busy period of activity at Asos, with continued growth and accelerated investment," said founder and chief executive Nick Robertson. |
David Alexander, retail analyst at Conlumino, said the results were impressive. | David Alexander, retail analyst at Conlumino, said the results were impressive. |
"A minor loss of momentum should not detract from an upward trajectory which has seen the fashion retail powerhouse post stratospheric numbers in recent times," he said. | "A minor loss of momentum should not detract from an upward trajectory which has seen the fashion retail powerhouse post stratospheric numbers in recent times," he said. |
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