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ASC - ASOS News Story

4468p -123.0  -2.7%

Last Trade - 28/10/20

Sector
Consumer Cyclicals
Size
Large Cap
Market Cap £4.58bn
Enterprise Value £4.49bn
Revenue £3.26bn
Position in Universe 163rd / 1802

GRAPHIC-ASOS, AO World and Ocado winners as online sales surge during UK lockdown

Thu 3rd September, 2020 3:25pm
By Elizabeth Howcroft LONDON, Sept 3 (Reuters) - A rapid shift to online shopping in Britain due to COVID-19 has boosted retailers' sales and share prices, even though footfall in high street shops remains well below pre-pandemic levels. urn:newsml:reuters.com:*:nL8N2FN19X The half-a-trillion dollar retail industry suffered a near-fatal blow in March, when the United Kingdom enforced a lockdown to limit the spread of the virus. But although one in 10 physical shops remain empty, meteoric gains in major online players have helped the MSCI's UK retail index outperform the country's benchmark FTSE 100 .FTSE by a huge margin. 1/ DING DONG! YOUR FOOD'S HERE Among the star performers are online grocery shops such as Ocado Group OCDO.L which have seen demand surge as British people eat at home more. The strength of supermarkets' online offerings have been the key determinant in how they have fared. Ocado shares are up around 120% since the start of March, compared to small declines in traditional supermarkets such as Tesco TSCO.L (down around 4%) and Sainsbury's SBRY.L (down 10%). From March to May this year, the proportion of UK food sales made online shot up to 11.3%, doubling within a few months, prompting Tesco to step up hiring to cope with the exponential growth. urn:newsml:reuters.com:*:nL4N2FQ2G7 "The pandemic has digitised whole new sections of the population," said Clive Black, retail analyst at Shore Capital. "Online is here to stay." Online shopping as a proportion of UK sales surged in March, April and May. But while online shopping for non-food products has since dipped, online grocery shopping remains elevated. 2/ PYJAMAS TO WORK Online clothing giant ASOS ASOS.L is another star performer, with shares up around 70% since the start of March as people working from home loaded up on loungewear. Fast fashion company Boohoo BOOH.L had been quickly recovering from an early-March lockdown dip, until its share price took a hit in July when The Sunday Times reported on dire conditions in one of its factories. urn:newsml:reuters.com:*:nL8N2ED0X5 urn:newsml:reuters.com:*:nL8N2EH3V5 But, it soon recovered and in the 12 weeks to Aug. 25, ASOS and Boohoo grew the quickest within the apparel space and, along with JD Sports, gained market share, according to Barclays equity analysts. 3/ PEOPLE AND PETS AT HOME Pent-up demand has seen a rise in spending in home improvement sectors like DIY and furnishings, said Peel Hunt's retail analyst John Stevenson, as many people saved money during the lockdown and, stuck at home, spend more on improving their surroundings. Kingfisher KGF.L , which owns DIY store B&Q, has jumped 47% since the beginning of March, while Dunelm DNLM.L is up around 40%. British discount retailer B&M BMEB.L , was promoted to FTSE 100 after outperforming. urn:newsml:reuters.com:*:nL4N2FY1ZZ It's not just furniture and decorations: Pets at Home PETSP.L shares shot up more than 30% in July as demand for pets during the pandemic offset the impact of fewer owners seeking its vet services. Morgan Stanley, Citigroup and Liberum have all raised their target price since then. urn:newsml:reuters.com:*:nL3N2F22KZ Tech hardware firm AO World AO.L , one of the biggest winners during the health crisis, has seen revenue surge both during lockdown and as it eased, with the share price up a colossal 187% as of Thursday. "Fundamentally they're probably going to end this year with 50% more active customers than they had last year and those customers aren't suddenly going to switch away," Peel Hunt's Stevenson said. 4/ KABOOM! RETAIL SALES EXPLODE To be sure, the lockdown beneficiaries aren't relying on people re-furnishing their home offices every quarter in order to maintain their success. "No one's realistically expecting their sales to keep on growing at those crazy rates," said CMC Capital Markets analyst David Madden. But in a world of ultra-low interest rates, there are fewer attractive options for investors quitting airline and travel stocks, he said. ($1 = 0.7529 pounds) <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ UK food shopping stays online https://tmsnrt.rs/31PoFOO UK retail sales rebound https://tmsnrt.rs/3jzmF3t ASOS share price vs other clothing stocks https://tmsnrt.rs/32LsyUw Home furnishings stocks https://tmsnrt.rs/3lEoXA1 MSCI UK stocks https://tmsnrt.rs/32PqbQh ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Elizabeth Howcroft; editing by Emelia Sithole-Matarise) ((Elizabeth.Howcroft@thomsonreuters.com; +44 02075427104;))
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