A tale of two retailers

Asos’s statement was littered with superlatives and highlighted opportunities soon to be seized while Beales was necessarily more modest.

Some of the comparisons are striking. Asos’s international revenues rocketed 303 per cent to £32.2m – well above Beales’ total interim sales of £26.7m. Neither retailer paid a dividend – Asos because it wants to continue to invest in growth, Beales because it would be wrong to do so until full-year profitability is restored. Asos said first-quarter sales grew 52 per cent, Beales’ first-half turnover was down 2.4 per cent like for like.

But the stark contrast in performance was not mirrored in the share price reaction. Asos was down while Beales was a big riser. What does the reaction say?

The City was spooked by Asos boss Nick Robertson’s comment that there is evidence “to suggest the rate of growth in online sales has begun to moderate”. Hence sales in the 13 weeks to June 26 were “only” up by more than half. And although Beales has its problems, bosses Mike Killingley and Tony Brown are making a good stab of things. 

They have had to contend with the collapse of concessionaires such as Principles but has pulled off a coup by becoming the first independent department store group to carry fashion genius George Davies’s GIVe range, which is slated to debut in October.

AIM-listed Asos is capitalised at about £262m – more than main market retailers such as French Connection or Ted Baker. Beales is valued at less than £6m.

Asos, despite the ‘fright’, is a rising star and you could imagine it moving off the junior market. Beales is a minnow but if it gets things right it can continue to appeal to a niche customer base. Whether it should still be on the main market is another matter.

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