Online fashion retailer Asos has just announced bumper sales figures. Image courtesy of rgbstock/Robert Linder.
The UK’s high street shops may have experienced a boost during the Queen's Jubilee but while online fashion retailer Asos
has announced bumper sales figures, high street veteran Marks & Spencer's
(M&S) non-food sales are dwindling.
A recent survey conducted by the British Retail Consortium
(BRC) revealed that 'like for like' retail sales in the UK jumped 1.4 percent in June against a 0.6 percent fall a year ago as the Queen’s Jubilee celebrations drove shoppers onto the high street
However, yesterday (July 10) Asos cast its ‘bricks and mortar’ competitors aside, posting a 31 percent rise in first quarter sales.
Asos offers desirable and competitively priced fashion targeted primarily at women between the ages of 16 and 34 solely through its online store
Its UK sales rose by almost 8 percent to £48 million in the three months to June 30, a steady increase despite the economic pressures affecting many British consumers
Moreover, the group’s focus on international expansion
was validated as retail sales in the US soared to 83 percent, sales in the European Union climbed to 27 percent and sales throughout the rest of the world were up 61 percent. As a result, international sales now represent 65 percent of Asos’ total sales, an increase of 57 percent on last year.
Nick Robertson, chief executive officer, said: “We remain positive in our outlook, and continue to trade in line with expectations.”
Meanwhile, Marks and Spencer announced that its UK ‘like for like’ sales had fallen 2.8 percent in the 13 weeks to June 30, with food up 0.6 percent but general merchandise or non-food slumping 6.8 percent. Total group sales fell 0.7 percent.
While strong competition from other high street retailers, reported issues with inadequate ordering of stock as well as the recent bad weather could be partly to blame, the news has sparked concerns that M&S is losing its grip on the women’s clothing market and heaped pressure on chief executive Marc Bolland.
Bolland said: “General merchandise underperformed in a difficult trading season. We are confident we are taking the necessary steps to address this."
The response by M&S has been a management shake-up which includes the departure of its head of general merchandise, Kate Bostock to be replaced by John Dixon, the head of its food business.
While women’s fashion sales are only one aspect of Marks & Spencer’s business, following the announcement its share prices took a noticeable hit. Although, there is optimism within the financial markets that the company’s bias towards older demographics and more prosperous socio-economic groups will ensure its resilience despite a difficult retail environment.
It is important to note that much of the significant growth in sales experienced by Asos has been achieved in international markets, while the vast majority of Marks & Spencer's sales come from the UK.