British fashion retailer Asos has had to deal with a nearly 25 % profit decrease compared to the year before in the six months leading up to the end of February. The expansion costs were the main cause for the profit decrease.
Chinese expansion impacts profit
The six months up until the start of March Asos suffered an EBIT decrease of 22 % to 20 million pounds (24.1 million euro), even though turnover grew 34 % to 472.3 million pounds (569.7 million euro). The company's expansion meant profits decreased, as Asos seeks expansion into Chinese expansion. It also wants to improve several facilities, like the ones in Berlin and Barnsley.
"The increased pace of investment has reduced our profitability in the period, but will deliver significantly increased capacity as well as efficiencies in the longer term", CEO Nick Robertson said. Asos' ultimate goal is to get a 2.5 billion pounds (3 billion euro) yearly turnover, which it wants to reach through huge investments to help boost sales.