Retailers discounts boost sales

Wednesday, 10 November 2010

After months of special offers and mid-term sales, the discount strategy used by most of retailers starts to pay in terms of sales improvement. It does not matter what channel the apparel companies are using, as this marketing technique is offering positive returns for both traditional and new channels. The general pro-discount approach has also worked positively for the FashionUnited Top 100 Index, which closed yesterday at 1.181 points, with a light increase compared to the previous days.

Within such a prosperous scene, this week on-line retailer ASOS published covetable figures, as their retail sales were up 50% to £131.4 million with UK retail sales up 26% to £82.4 million. Further growth was driven by international sales for the 6 months ended 30 September 2010, which grew massively to £48.9 million, up 120%. Besides, gross profit increased by 43% to £57.8 million. Profit before tax was £7 million, up 59%.
But the British beloved one was not the only in hitting green numbers for their high street sales. Just on Monday, Adidas upped its sales forecast after reporting third-quarter net profit rose 25%. The company saw increased sales in all its regional markets and at its Reebok unit and said net profit in the three months ended Sept. 30 was €266 million ($375.6 million) compared with €213 million a year earlier. Revenue increased 20% to €3.47 billion from €2.88 billion.With such an impulse, and having the 2010 fiscal year in mind, Adidas now forecasts sales to rise around 8%, driven by strong growth at Reebok, exposure to emerging markets and the 2010 soccer World Cup. Looking to 2011, Adidas said sales are now expected to increase at a "mid-single-digit rate," with a jump in net profit also expected.

Third character to take protagonism on Tuesday was Gap. The American casual style brand finally reported an increase in comparable store sales, which went up to 2%. Their net sales increased 4 percent to $1.19 billion for the four-week period ended October 30, 2010. This compares to $1.14 billion for the same period last year. However, the company noted that merchandise margins for the third quarter of fiscal year 2010 are expected to be below last year.

Bad news were reported by Ttriumph, which lost nearly 10% of its value; American Apparel with a drop of 2.53%, or BEBE Stores, which saw cuts by more than 2.8%.

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