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ASOS plans move to London Stock Exchange’s main market following successful trading period

Tom Shearsmith
13 January 2022

ASOS has announced its intention to move to the London Stock Exchange’s main market, following a rise in sales over Christmas in key regional areas.

For the four month period ending 31 December 2021, ASOS reported overall total sales growth of 5%, in line with previous guidance. The UK continued to perform strongest, with a 13% sales growth compared to the same period in 2020, with consumers demands for partywear and outwear cited as a major contributor.

EU sales grew by +2% in the period and was significantly impacted by the COVID-19 Omicron wave, with resulting restrictions limiting events and social occasions.

The US delivered strong growth of +11% despite significant port congestion and supply chain disruption inhibiting the company's ability to fully service demand. Throughout the rest of the world, performance dipped -15%, reflecting the continued impact of delivery disruptions.

ASOS confirmed that the Topshop brands (Topshop, Topman and Miss Selfridge) continue to perform well on the ASOS platform, posting strong growth of more than 200% year-on-year. The brands performed well across all regions, with the UK, Germany, and US continuing to post the highest growth.

Gross margin decreased by 400 basis points to 43%, driven by increased clearance activity to shift slow-moving SS21 stock, increased freight costs, and the use of air freight to avoid continuous supply chain constraints and maximise peak trading periods.

Active customer base increased by 0.3m customers to 26.7m, reflecting slower customer growth as the company cycled a period of strong customer acquisition in P1 FY21.

Whilst both demand and returns rate uncertainty related to the Omicron variant are expected to remain in the short term, the company's guidance for the year remains unchanged with revenue growth expected in the range of 10%-15% and adjusted PBT of £110 million-£140 million.

ASOS also confirmed its intention to move from London Stock Exchange’s junior AIM market to its main market, expected by the end of February 2022.

The Company is currently in the process of preparing a Prospectus in connection to its application for Admission, which will be subject to approval by the FCA. The Company is currently in the process of preparing a Prospectus in connection with its application for Admission.

ASOS’ directors believe that "given ASOS’ size and scale, now is the appropriate time to move from AIM to a premium Main Market listing." Over the past 20 years, the Company has demonstrated a proven track record, built a broad shareholder base, and has adopted, applied and reported against the UK Corporate Governance Code for several years.

Mat Dunn, COO at ASOS, said: “ASOS has delivered a robust start to the year, in line with the guidance we set out at full-year results, despite challenging market conditions. This performance reflects the strength of our offer, excellent customer experience and the dedication and hard work of all ASOSers. We continued to make progress against our objectives to improve the flexibility and speed of our retail model and accelerate the pace of delivery of our international growth strategy. Looking ahead, while mindful of the near-term uncertainty relating to the pandemic, our guidance for the full year remains unchanged.

“We are also pleased to announce today that we plan to move to the Main Market of the London Stock Exchange. Our listing on AIM for the past 20 years has been an important part of ASOS’ development, but the time is now right to move to the Main Market as we focus on delivering our medium-term guidance and longer-term growth ambitions.”

The online retail giant also today announced the appointment of Patrick Kennedy, Chairman of Bank of Ireland Group plc and former Chief Executive of Paddy Power, as Senior Independent Non-Executive Director and Audit Committee Chair with immediate effect.

Wulfric Light-Wilkinson, General Manager at Wunderkind, commented: "To maintain and grow its revenues, ASOS must focus on having a competitive edge in the market. Major rivals like Shein are growing in popularity, especially with key demographics like Gen Z, due to low price points and offers, often promoted extensively across social media channels. However, this can only get you so far. The key for retailers is growing customer lifetime value, and this is built through gaining shopper loyalty and giving them reasons to return time and time again."

Justin Biddle, UK Lead at Shopware, added: "ASOS has had its fair share of challenges, ranging from supply chain struggles to increased online competition from challengers like Boohoo and Shein who are attracting customers with enticingly low prices and aggressive marketing tactics. This, coupled with the shock departure of its CEO Nick Beighton at the end of last year, means ASOS is entering 2022 in a precarious position.

"As a pureplay online retailer, ASOS has the digital expertise to ensure it has a competitive advantage online against its omnichannel rivals. However, its shiny platform could certainly benefit from some attention as it was recently ranked as one of the least accessible websites. As digital natives, ASOS must be on the front foot with its online user experience and prioritise developing online and in-app experiences that cater towards all customers, and ensure that webpages are decluttered and easy to navigate."

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