ASOS, the online fashion retailer, has accelerated its investment in warehousing both in the UK and Germany and in IT. It will now invest at least £68m in capital expenditure in the current year compared to the £55m previously planned.
The aim is to increase sales capacity to some £2.5bn per annum, over £1bn higher than previous guidance.[asset_ref id=”2216″] Nick Roberston
Chief executive officer Nick Robertson said: “Our investment in warehousing necessitated levels of dual running costs over the period which will ease from H2 2014/15.”
And he warned: “This investment, as well as the investment in our China start-up, will reduce our EBIT margin for the current financial year to 31 August 2014 to c.6.5 per cent. This year these costs will be disproportionately borne in H1, resulting in a likely H1/H2 Profit before Tax split of approximately 30 per cent/70 per cent.”
In a trading statement, ASOS said sales in the six months to 28h February were up 34 per cent to £481.7m and the group now expects to achieve full year sales of more than £1 billion.
Strongest growth was in the EU (excluding the UK) where sales were up 65 per cent to £127.6m for the first half.