ASOS increases IT and warehousing investment to £68m

Online fashion retailer ASOS has announced plans to increase its investment in IT and warehousing by £13 million.

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Online fashion retailer ASOS has announced plans to increase its investment in IT and warehousing by £13 million.

In October, ASOS said that it planned to invest around £110 million in IT and logistics over the next two years, or £55 million a year, to support its future growth plans.

However, in a trading statement for the two months ended 28 February 2014, Nick Robertson, CEO of ASOS, said: “We have accelerated our investment in warehousing, both in the UK and Germany, and in IT, so that we will invest at least £68 million in capital expenditure in the current year (previous guidance £55 million).

“This investment will increase our sales capacity to c£2.5 billion per annum, over £1 billion higher than previous guidance.”

As a result of the higher costs, ASOS expects its EBIT (earnings before interest and tax) margin for the year to 31 August 2014 to fall by around 6.5 percent.

“This year these costs will be disproportionately borne in H1, resulting in a likely H1/H2 Profit before Tax split of approximately 30 percent /70 percent,” Robertson said.

The retailer saw a 26 percent year-on-year increase in total group revenues in the two months to the end of February, from £110.5 million in 2013 to £139.1 million in 2014.

ASOS has previously said that its success so far was thanks to its investment in technology, logistics, marketing and people.

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