Retail Watch: ASOS profits surge in lockdown

April 13, 2021
3 min read

COVID-19 lockdown restrictions preventing bricks-and-mortar stores from opening boosted the shift to online fashion buying, benefiting ASOS. The online fashion retailer’s revenues increased 24% year-on-year to £1.98 billion in the six months to the end of February and, as recently announced, their half-year profits surged 253% to £106.4 million. As non-essential shops in England reopen this week, will ASOS continue to outperform brick-and-mortar stores?

Responding to demands for “lockdown” products

Online only retailers have undoubtedly hugely benefited from the closure of non-essential retail for prolonged periods and the shift to online shopping as a result of COVID-19. Nevertheless, the strong growth reported by ASOS during the period is also due to the company’s ability to nimbly respond to the changes in shopping behaviour seen during the pandemic. The retailer has remained flexible in responding to demands for “lockdown” products, as sales of formal and outfits for social events dried up, with shoppers instead turning to “activewear” and “casualwear”.

ASOS expanded its loungewear offering in lockdown

Source: ASOS

Mintel’s Brand Research shows that ASOS stands out from its rival pureplays as the most trusted online-only fashion brand, with consumers rating it as the brand that they would most recommend. Its ongoing focus on its unique ASOS brands including its recently launched value fashion brand As You, alongside adding new brands such as Topshop to its platform have helped it to stand out in a competitive market. 

A renewed demand for occasionwear

Mintel’s latest Fashion Tracker data shows that there has been an increase in dress purchases in the three months to April 2021 in anticipation of the easing of restrictions, peaking among Millennials. This follows a big decline in purchasing of occasionwear including dresses in the run up to December 2020, as Christmas parties and events were cancelled. 

In line with this, ASOS is now marketing post-lockdown outfit ideas on their website, aimed at young customers looking to refresh their occasionwear wardrobe as restrictions ease gradually across the country.

ASOS’ homepage features garden party outfit inspiration

Source: ASOS

The retailer’s website also includes a “May 17th edit”, which includes spring/summer clothes for the next step in England’s roadmap out of lockdown.

“The May 17th edit”

Source: ASOS

Whilst ASOS forecasts that the easing of restrictions will lead to renewed demand for occasionwear, it highlights that its younger customer base is in an increasingly challenging financial position and this will continue to impact their spending levels.

Additionally, ASOS has other online-only retailers to compete with: brands such as Missguided and Pretty Little Thing are also looking to benefit from the renewed demand for occasionwear, including categories such as “lockdown exit outfits”, “beer garden outfits” and “garden party dresses” on their website.

“Beer Garden Outfits” on online retailer Missguided’s website

Source: Missguided

Tamara Sender
Tamara Sender

Tamara Sender is a Associate Director – Fashion Retail at Mintel. She researches and writes for Mintel’s UK Fashion Reports.

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