Why Primark couldn't say 'no' to ASOS
With a one billion pound sales ambition in sight, the UK online-only retailer Asos achieved notable results by aiming for aggressive momentum. Founder and CEO Nick Robertson has had a very positive outlook for the company's global expansion, narrowing its target audience to a niche market of trend-forward twenty-somethings.
Associated British Foods' budget retailer Primark has unexpectedly announced a trial partnership with Asos just two month after deciding not to go forward with their own online channel.
“Primark is steadfast in its opposition to an online operation, preferring to open new and bigger stores at a time when high street rivals are focusing on multichannel sales, smartphone apps and click-and-collect services”
Although Primark has reported exceptionally strong sales figures this year, with a 24 percent increase to £2 billion for the first half of its financial year, the opportunity to partner with Asos was perhaps to good to say 'no' to. As done in their Boutique section, Asos will run trials consisting of a small product selection, which will allow Primark to continue to focus on its brick-and-mortar expansion. The deal allows Primark to test how an online channel will speak to its international customer without a heavy up-front investment.
Asos has proven global success with a 37 percent increase in quarterly sales, drawing from British high street fashion and maintaining a keen eye for trend. Primark's rival high street brand New Look joined Asos last year on the site and has become one of the site's top selling brands.
Source: AB Foods 2012 Annual Report
