Asos boss expects Russia to become more difficult amid Eastern Europe troubles

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Asos boss Nick Robertson said he expects Russia to become more difficult to trade in as the troubles in Eastern Europe continue.

Robertson made the comments as he confirmed that Asos would achieve its £1bn sales target it set in 2010 this year, a year ahead of schedule.

Robertson pointed out that Russia - where Asos launched an own-language website last May - was still a non-material part of its business but said the declining value of the Russian ruble, which dropped when the country deployed troops to Crimea, could hinder trading.

Despite a 26% group sales rise in the two months to February 28, Asos sales in the rest of the world edged up just 3% as adverse currency movements, particularly in Australia and Russia, impacted trade.

Robertson told Retail Week in January that Australia was “not a great place to be” as the weak Australian dollar meant that its products appeared 13% more expensive to consumers in the country.

He said that taking out the effects of exchange rates, sales in the rest of the world would have been up 15%.

Robertson said Asos is “trading” its Australian site, which accounts for around 10% of total sales and 40% of its rest of world tally, to push sales and negate the impact. It plans to introduce zonal pricing next month.

He said that reaching the £1bn turnover target a year early would mean growing at between 27% and 28% this year, which he said “feels achievable”.

Asos’ next “stepping stone” is a £2.5bn sales target, according to Robertson, who declined to give a timeframe for the target.

The etailer is ramping up investment to enable it to achieve its target. It is bringing forward the extension to its Barnsley distribution centre and is also investing in its European returns hub which will open in Germany in April.

The etailer has upped its level of investment from an expected £55m to “at least” £68m which, along with the expected £9m loss from its first year trading in China, will reduce EBIT margin for the year to August 31 to about 6.5%.

Asos this morning revealed that total retail sales were up 26% to £136.7m and UK revenue rose 21% to £48.4m in the two months to February 28.

Robertson said that the UK was “a bit slow” in February, which he believed was felt across retail, but said trade had been better in March.