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ASOS Shares Plummet After Investment

Tuesday March 18 2014

SHARES in online fashion retailer ASOS have sunk by more than 16 per cent after the firm increased its spending plans to deliver long-term growth.

The Barnsley-based firm said it would spend £68 million this year to increase its warehouse space and improve IT systems.

It is hoped this investment will boost its sales to £2.5bn a year.

In the first two months of 2014, total sales were up 26 per cent from a year earlier, with the retailer seeing its strongest performance in the EU, where sales rose 57 per cent in the same period.

Nick Robinson, CEO of ASOS, said: "The £68m investment will reduce our EBIT margin for the current financial year, but we have seen 8.2 million active customers and that is a 36 per cent increase from last year."