Shares in two Aim-traded online fashion retailers have flown upwards since the coronavirus took hold in the UK in spring. One outfit, Boohoo (BOO), took a temporary hit in the summer over allegations surrounding factory working practices that were subsequently upheld. The controversy didn’t stop Boohoo growing its half-year pre-tax profits by more than a half, as more shoppers opt for cheaper, faster fashion options from the comfort of their sofas, instead of braving the high street during a pandemic.
It is the turn of Asos (ASC) on Wednesday 14 October to release results, when it will publish its full-year figures. Some of its expected gains will already be priced in. In August, the company told investors to expect sales and profit that will be “significantly ahead of market expectations”. Revenue growth will sit between 17 and 19 per cent, with pre-tax profits expected to range between £130m and £150m. Customer returns have not returned to normal levels, as the company had originally anticipated once coronavirus restrictions eased.
Given Boohoo’s missteps this year, we wouldn’t be surprised to see Asos go hard on its sustainability credentials. Unlike Boohoo, Asos already publishes a list of its suppliers (Boohoo has now pledged to do so). Asos ranks in the top half of Fashion Revolution’s 2020 Fashion Transparency Index, compared with Boohoo, which sits in the bottom 10 per cent.
