Asos and Primark still in talks to make online trial work

Asos chief executive Nick Robertson said: “We’re still trying to work out a way that we could do it. Could we sell things above a fixed price or we could do it so they buy an Asos item with every Primark item? There’s lots of nuances.

“We have to see what they buy and what the returns rate is going to be. If we can make money at it, we’ll both look at each other and will say let’s go for it.”

Value giant Primark took its first steps into online retail in early June when it launched on Asos. The trial, which grew to around 140 items, got off to a “phenomenal” start, Robertson told Retail Week in mid-June however Primark revealed it was ending the trial last month.

Robertson said that Primark’s price points posed difficulty for Asos, which operates a free delivery and return model.

He said: “That costs me a significant amount for every order that goes out of the door. If the average unit price of every order is so low that doesn’t give me any wiggle room to make money and they’ve got the same issue.”

“The issue is not do they want do it – of course they want to do it. The issue is can we do it and can they make it profitable?”

Robertson said he could not sell Primark clothes overseas because distribution costs were so high. “It costs me three quid to send it to Australia, well the thing only cost three quid in the first place,” he said.

Brands such as New Look and The Kooples launched on Asos last year and Jack Wills and Inditex-owned Pull & Bear have made their debut on the site since the year end.

Asos today revealed pre-tax profit grew 23% to £54.7m in its full year to August 31 and retail sales surged 40% to £753.8m.

It revealed plans to step up investment to £110m in the next two years including the opening of a supersized European distribution centre.