ASOS Plc (ASC) Earnings Call Transcript & Summary

Good afternoon, and welcome to our Capital Markets event today where we'll be showcasing the retail side of our business in a sort of parallel format with Q&A at the end. Of course, we won't be discussing any sales trends today, and, listen, I hope you really enjoy it. So before I dive in, I just want to remind you of our ambition we set ourselves here at ASOS, where we're relentlessly focused on becoming the #1 destination for fashion-loving 20-somethings worldwide. And so to emphasize, it means we're not just a retailer. It means we're not just a platform. We are a destination, a destination at ASOS. A destination that's got 20-somethings covered for all their fashion needs, with all their favorite products and brands, a core place to hang out, with the best edit of fashion and experiences, experiences that are aspirational, authentic, inspiring, sometimes irreverent and sometimes playful. Our mission is to become the #1 destination for fashion-loving 20-somethings, and we are led by a strategic framework that consists of 5 strategic priorities. These priorities have continued to guide our business -- guide our business decisions and guide the allocation of resources. Coupled with the ASOS purpose, the ASOS vision and values, they serve as our true north. Today, we'll be honing in on the core of our business, our product offer. This is anchored by ASOS design and the curated multi-brand offer. It's all driven by the capabilities that are at the core of our business: designing, styling and merchandising amazing product. We curate and create the best fashion. We do this in an agile, responsive way, all done with fashion with integrity, which is nonnegotiable in our business and supporting the inclusivity of our fashion offering. The ASOS platform, which is a multi-brand curated offer, on a platform that showcases over 850 of the most relevant brands. This offer is designed to cater for each moment in a 20-something lifestyle, and supported by our ASOS experience, delivering a leading online experience. which is engaging, inspirational, exciting, friction-free and personalized. The ASOS product offer and customer experience is designed, so it's the only fashion app a 20-something customer will ever need. So today, I'm delighted to introduce you to some of our team. Firstly, Jose Antonio Ramos, our Chief Commercial Officer, who brings with him a wealth of retail experience. Jose joined us earlier this year from Salsa Jeans where he was the CEO. Prior to that, Jose was at Esprit, Carrefour, Inditex and started life at McKinsey. Jose is currently based in Portugal and will, of course, relocate to the U.K. once the COVID travel-related restrictions ease. So Jose be joining us from Porto via video link today. Vanessa Spence is our Design Director and has been with ASOS for 13 years working across numerous design roles. Prior to that, she was at Pepe Jeans and Arcadia. Everything ASOS design will have been created by Vanessa and her team. Nikki Tattersall is our Womenswear Buying Director and has also been with ASOS for 13 years, working across several buying roles. Prior to joining ASOS, Nikki works in buying roles at TK Maxx and Etam as well. Right. I'd now like to hand you over to Jose, who will pick up the presentation from here. Thank you.

Hi. Good afternoon, everyone. Really happy and excited to be here with you today, and I just wanted to pick up a little bit on Nick's words and highlight a couple of things that, in my opinion, make the ASOS experience completely unique and differential. Being the first one, our assortment, the assortment we offer our consumers. We offer a unique blend of one of the most iconic brands in the world and also our own brands. And it's not only that we offer this unique blend. It's just that we make a curated selection of this brand. So we always decide exactly what we want to have in our platform always with this 20-something consumer in mind. And that altogether makes a unique experience, an experience that has grown lately by the addition to our portfolio of the Topshop, Topman, Miss Selfridge and HIIT brands that clearly come to complement and make the portfolio even more compelling to our consumers. The second one, if you could move on, please. The second thing that is absolutely differential for ASOS is that we offer this assortment with a very specific and characteristic way of looking at it. That is the way we show -- we picture that assortment to our consumers, and that is shown in our visual language. This is a visual language that is created not only with the way we select the models, but also the way we style them, the way we design their poses, their hair, their makeup, absolutely everything. And this is a lens that we applied both to our own brands, but also to third-party brands. And it's really appreciated not only by our consumers, but also by these third-party brands. And we will see later in the presentation how some of the most iconic brands in the world are asking us to cooperate with them to really apply these specific and unique approach into fashion. And the third 1 -- the third characteristic that I think that makes us unique, and if you could please move on. It's that we do all these always through the lenses of our core values of inclusivity and fashion with integrity. And when I'm talking about inclusivity, I'm not only meaning inclusivity in the sense of gender and race. That, of course -- it is part of it. But I'm talking about inclusivity in the sense of body types and sizes because I actually see ASOS as the ultimate democratic approach into fashion. It's like we are trying to make fashion approachable to every consumer, not only based on taste level or on socioeconomic reasons, but also on body types. Fashion is for everyone, and we truly believe on that. We say it out loud. And actually, we see with pride that some international and important brands out there are also taking this direction of this inclusivity that we think is absolutely core to fashion these days. And of course, we'll have an eye on sustainability. I mean this is probably not differential because you will hear that word many -- quite often these days. But we are absolutely convinced that fashion will be sustainable or will not be. And that's why we are so committed. And within our program of fashion with integrity, we are truly committed to make sure that our fashion approach is always sustainable and -- both from an environmental, but also from an ethical point of view. So it's not only from a planet point of view, but also from a people point of view that we are really committed. And we are taking clear and determined actions in that direction, and we will hear a little bit about that later on. So when you bring it all together, maybe you can move on, please. This is what makes the ASOS experience -- and it's a unique experience for our consumers. And it's an experience that is aiming to attract all type of fashion-loving 20-somethings. We are not going just after any specific segments. We're going for -- behind a much wider approach of the market regardless of their taste level, if you want, regardless of the occasion and regardless of the geography. We have the ambition, as Nick said, to be the world's most sought after or more desired fashion destination for all fashion-loving 20-somethings. I'm going to give way now to Nikki and Vanessa that are going to elaborate a little bit more how we do these things. So Nikki, Vanessa?

Global retail landscape, combined with our first-hand knowledge of the 20-something customer enables us to identify gaps in the market and anticipate future opportunities. We surface this through our exclusive in-house brand portfolio. Sales of our owned brands have doubled in the last 5 years, and we now have 19 brands and logo carriers accounting for broadly 40% of our sales mix. The portfolio is split into 2: ASOS brands and Venture brands. The largest brand by far is ASOS Design, which especially when combined with its sub-brands, including ASOS 4505, ASOS EDITION and ASOS Curve, offers every customer fashion for all aspects of their lives. In 2018, we established the Venture brand team with the vision of creating brands for the next-generation 20-somethings, Gen Z. Our approach from the outset was to talk to and collaborate with this future consumer and create new brands that would stand the test of time. An example of this is Collusion. And of course, in recent months, we have added Topshop, Topman, Miss Selfridge and HIIT into this portfolio. So how do we deliver this through our global supply chain? Our own brands are based on a dynamic buying model, which is centered around flexibility and agility. To be able to respond to the customer demand quickly, going really fast when we need to is essential. But to do this, we have to have the right foundations in place. Lots of people talk about how fast they are, but we have to go fast ethically, responsibly and as sustainably as possible. Our own brand offer is 41% short lead and 59% long lead manufacture. Where we make our product varies by category. We have multiple lead times running in parallel. Up to 60% of our fashion jersey is sourced from the U.K. and Europe, whereas our outerwear and footwear are manufactured predominantly from longer lead regions. However, a primary focus for our buying teams is injecting greater levels of trade ability and reactivity across all product categories. For example, last year, we introduced North Africa as a sourcing region, which gives us the flexibility to deliver coats to site within 7 weeks, saving up to 10 weeks compared to a standard longer lead region and allowing us to react to emerging trends. In the U.K., reserving production capacity, holding fabrics, labels and trims with suppliers and ceiling patterns digitally means we can reduce lead times between 2 and 4 weeks. We also hold 0.25 million plain tees and sweats in the U.K., ready for printing, embroidering and garment dyeing. And now Vanessa and I will talk you through 2 of our brands that are part of the exclusive brand portfolio. ASOS Design is a brand for all moments of a 20-somethings' life. Our teams use customer and trend knowledge to create ranges targeted at the specific end uses and occasions that make up how our customers live their lives, where they go and what they do from day to night, chilling at home through to their most Instagrammable moments, fully inclusive. Our sizes range from 2XS to 4XL on menswear and size 2 to 32 on womenswear across petite, tall, maternity, plus and hourglass fits. And the dynamic reactive buying model we have in place has enabled us to pivot our product ranges to reflect the significant shifts in lifestyle our customers have experienced in the last 12 months. Meaning casual wear and loungewear have been core staples of our 20-somethings wardrobe. On ASOS Design, this is brought to life across sweats, tees and tracksuits in so many different ways. 85% of the cotton used on ASOS Design is either organic or from the Better Cotton Initiative. Most recently, our customers have loved optimistic slogans and tidies with oversized silhouettes. And as we move forward, color drench brights and new takes on jersey leisure will refresh this category.

And then in contrast to the casual product Nikki just showed, ASOS Design also covers all dress-up moments for our 20-somethings. So a few examples here. So gorgeous summer dressing and perfect for those pit mixing your out occasions and then also trophy menswear printed shirts.

Jeans have been everyone's go to in recent months. It's no longer about the skinny. It's all about relaxed fits, especially what we called borrowed fits, whether that be the boyfriend's shape, the mum jean or the dad jean. These '90s silhouette styles have been stand out across both women's and menswear. All cotton within ASOS Design jeans is either BCI organic. And our new denim collection uses 50% less water during the washing and finishing process compared to conventional jeans.

And then on to another sustainable initiative. So we launched our first Circular Collection back in September. We trained all of our designers in circular practices and the whole retail team will be trained by this autumn. So here's an example, a denim jacket. So it's unisex. It has recycled import. So it's made from 20% recycled cotton. It uses low water processes. And one of the key principles is ensuring the product is easy to recycle. So on here, you can remove the buttons really easily just by screwing them off, which is a really key detail.

20-somethings love being active, whether that's yoga in their living room, a run in the park or skiing on the slopes. One of our biggest sub-brands is ASOS 4505. It's an activewear range that combines technical performance qualities with a focus on fashion. Leggings and joggers became a way of life, but we take a fashion approach to these sub-brands.

And then on to logo carriers. So we identified an opportunity on logos. We could see they were really resonating with our 20-something customer because of their love for streetwear brands. So we created our own. Dark Future is one of our menswear logo carriers, and it's been a huge success. So we are constantly reinventing the design, so just based on the new trends that are coming through. And then we use our U.K. short-lead printing routes for speed to market.

And the womenswear version of that is called weekend collective. It provides a real off-duty glam look and has been loved by both influencers and customers alike.

So as the world becomes -- starts to come out of lockdown, we're ready with product to take you from the beach to true going out. So starting off with some swimwear pieces. So just some key trend pieces of like the it trends of the season. So colors in terms of browns and neutrals and also just to say 70% of our swimwear is made from recycled materials.

Our customer knows us as a destination for the perfect items for going out. We keep this area short lead and reactive but as flexible as possible. A significant proportion of this product is made in the U.K. Our supplier partners hold key fabric explorers. We have the patents digitally sealed. And with production capacity reserved, we can go from sketch to site on this type of product within 2 weeks.

So then on to 2 occasion products. So product you just really cannot get anywhere else and there are amazing price points. So anything from like handcrafted embellished dresses like this one here and then also standout menswear tailoring in the [ sportish jacket ]. And then finally, just to show you some bridal. So we sold one wedding dress every 3 minutes during lockdown, which is an amazing stat. We love that stat, don't we?

Okay. And then we launched Collusion in October 2018. It's a street brand with a casual aesthetic, which has meant that it's really come into its own in the last 12 months, leading it to become known as the unofficial brand of lockdown. Listening to and collaborating with the target Gen Z consumer has been at the heart of the brand strategy from the outset. Prior to launch, we collated a panel of Gen Z influencers and asked them what they wanted from a future-facing fashion brand working with them on creating the DNA that helped shape what Collusion is today. It's led us to take a fresh approach with 30% of sales coming from unisex product and the brands being completely animal free. We're thrilled of the growth in the last 2.5 years, and it's now the second highest search brand on ASOS with an average customer age of 22. From the outset, the customer has loved the Collusion brand carriers, really wanting to wear this logo. These styles have been fantastic. This is our unisex collection, so it's sized to fit both men and women. It's been super successful. And since launch, we have sold 2 million units of this type of product, which is a real testament to how much this brand is resonating with the target consumer.

And then just some key trend pieces on Collusion. So the '90s is a huge reference for the Gen Z customer, and this brand is definitely leading the way. We've got a great menswear print cohort with a really distinct handwriting. And then on womenswear, the cohort with the must-have '90s squanchy.

We continue to grow and evolve the brand. And last week, we launched the first swim and beat range. It echoes the '90s Gen Z themes seen on clothing, but puts a unique twist on all things sum up. with bold and bright crib prints across menswear and womenswear, which also follow through onto the graphic tees and shorts.

So how do we create this unique offer? So we have a design team of 100 designers who work across approximately 50,000 options per year. The designers are split into teams across ASOS Design, Venture, the sub-brands, and this is just to ensure a really clear and distinct handwriting across each brand we create. The team are truly creative, design influence every single option. So like whether working on entry price point pieces or creating handcrafted, embellished dresses at exit price points. The team also work with pattern cutters to create unique designs, and they're just things that our 20-somethings just would not find anywhere else. We also use technology within the process. So we actually have an in-house 3D printer. And by using this, we can reduce lead times on footwear by up to 6 weeks and also reduce the number of samples that we create. So I've got an example here. So this is a 3D print on a chunky trainer. So just by print there helps, just like I said, reduce the lead time, and we have the first photo. Then that helps us get to the final sample that Nikki is just holding just there. And then we are really excited to be trialing 3D design technology on clothing. So if you see the video at the bottom of your screen, by designing directly onto an ASOS avatar, every single design detail can be seen in 3D before sending it to our suppliers. So like the future ambition with this would be to reduce the number of physical samples and reduce lead times even further. So then another element of creating the offer is research. So it all starts with research. We are 20-something obsessed. Social media is a huge reference point for us. So Instagram, TikTok, Clubhouse, all help us understand our 20-somethings globally. Pre-COVID, we would have been traveling the globe for inspiration, so visiting exhibitions, shops, rummaging through vintage archives, but, obviously, the pandemic has impacted this type of research. But because we do understand our 20-something customers so well, we've pivoted into new cultural moments, so things like TV, film, gaming. I mean who would have thought Tiger King would have been a fashion inspiration, but he was. We also focus on end use. So this is about really considering where our customer is going in our products. And this knowledge also helped us pivot. So we went from I'll be the night to Zoom dates, festival fills to weekend walks, but we are primed for the end of lockdown and ready to move back to weekend brunching, staycations, cocktails, club nights, but still keeping some elements of what our 20-somethings love during lockdown. And then once we've identified these cultural moments, we drop the hottest trends on site as quickly as possible. So we have a dynamic buying model. And this is a continuous cycle of test, learn, repeat and move on. So I've got an example here on screen, Bridgerton, so the Netflix hit of lockdown. Our customers loved it. The design team quickly identified the key elements of this trend, which was core suits and florals, We then used our short-lead mechanisms to get it on site within 4 weeks. And we've had amazing sales. We'll now repeat it and back this trend with conviction.

Okay. So as a multi-brand destination, we can offer our customers something unique. Alongside our own brand portfolio, we stock an edit of over 850 brands. Our laser focus on the target customer, combined with our fashion credentials and market insight, means we're first in line for many brands to collaborate with on creating exclusive styles and ranges. These exclusive styles when combined with our ASOS brands mean around 45% of the product we stock can only be found on ASOS. In addition, we don't stock 100% of any brand. It is a curated assortment and edit seen through the ASOS 20-something lens. We do this by working in partnership with brands to create an offer like no other, understanding their essence and then applying our customer knowledge to ensure optimum excitement and relevance and then, of course, presenting it in the ASOS way by shooting it in the ASOS Studios. We continually review and refresh the brand listing onboarding over 100 new brands every season from large global players such as NIKE, Ralph Lauren and Abercrombie & Fitch, through to up-and-coming new talent. A long-time supporter of emerging brands, we work with designers and entrepreneurs, supporting them to reach scale and grow alongside us. In recent years, but particularly in the last 12 months, we've seen an increase in the emergence of what we call bedroom brands. Labels started at home by fashion entrepreneurs, gaining traction by selling direct to their followers through social media channels. Our buying teams are constantly reviewing the social media landscape to identify these brands, then supporting and guiding them through delivering an edit for ASOS that introduces their label to a new global audience. We also partner with brands on knowledge sharing, learning and collaborating in the areas of ethical trade and sustainability standards. To be stocked on ASOS, the brand has to meet 5 minimum requirements. They must have policies in place covering ethical trade, chemical compliance, modern slavery and animal welfare and visibility of their Tier 1 factories is mandatory. In addition, we work closely with brands on range enhancements, encouraging size extensions and a more inclusive approach. This season, we have new larger sizes, launching in collections from Calvin Klein, Levi's and Tommy Hilfiger. And we also collaborate creatively on ranges exclusive to ASOS. For example, in addition to an edit of their main collection, this week, we're launching our second exclusive collection with Polo Ralph Lauren. Harnessing our deep understanding of the 20-something customer, our creativity and our fashion credibility, the ASOS buying team have partnered with the Polo designers to co-create this unique 54 piece collection. With the use of soft pass stills and seaside stripes, the collection focuses on cohorts and key summer staples, talking directly to the versatile approach our customers will be taking to their wardrobe this summer, all presented on site in a way that only ASOS can. Both brands are super excited for this launch and the ability to inspire the ASOS Gen Z customer to put their own twist on such a prestigious and iconic U.S. brand. And Vanessa has another exciting example of a collaboration.

So we have a totally unique way of working with some of our biggest sportswear brands. They love our 20-something fashion lens. We co-create collections with them like pieces that just wouldn't feature in their ranges without our fashion input. So I've got an example here on screen. The ASOS Design team identified a trend inspired by retro sportswear and tennis whites. This was then presented to the Adidas team, and we cocreated this collection to create an authentic fashion look for our 20-somethings. And then it was brought to life on site with our unique product presentation. This actually dropped last week, and it's been a company bestseller.

A little bit about the last growth in our ASOS family, that was the acquisition of Topshop, Topman, Miss Selfridge and HIIT. And I would like to start talking about first why that was a -- we think that was a good idea. Maybe we move on, please. Well, with this, idea in mind of we want to be at the fashion destination for all 20-somethings, having a set of additional brands was making perfect sense, especially these brands that were completely resonating with our consumers and were coming to complement our offering to them. So in that sense, just from a mere product perspective, the fit was absolutely perfect. Additionally, I think it's worth mentioning that those brands were bringing something that was very valuable for us. That it was the connection, the strong connection these brands have with consumers, especially -- obviously in the U.K., but outside of the U.K., in Germany and the U.S., be in those 2 markets is absolutely strategic for ASOS. So I think that for these 2 reasons, it was a perfect fit into our portfolio and a perfect addition into the ASOS family. May we move on, please? After really, I would say, record-breaking integration of just 3 weeks, we started operating with them. And I have to admit that the first results are really satisfactory. So far, we are seeing an amazing performance with triple-digit growth of these brands. [Audio Gap] really. And moreover, I think it's also worth mentioning that in those strategic markets of Germany and the U.S., we are seeing that 50% of the consumers that are buying in to these brands are new into ASOS. So these brands are becoming a little bit of a gateway to attract new consumers into the ASOS universe, which is a perfect way to reinforce our value proposition to these consumers in Germany and America. But this is not the only ambition we have for these brands. Maybe we can move on, please, ambition with them. Could we pass the slide, please? Thanks. So our ambition for these brands goes way beyond just attracting consumers in Germany and the U.S. We really want to make these brands exciting, iconic and absolutely a cornerstone of our fashion assortment. These brands have always been created -- were created along the idea of a connection with the world of fashion and created along the idea of a connection with an aspirational approach into fashion, the catwalks. And they were built over the idea of having a physical store network. So this brick-and-mortar connection to the consumers. And that was clearly having an impact on how they were creating their collections and how they were communicating to the consumers because in the moment that you are communicating through a physical network that imposes certain limitations in the sense of the physical assets that you have in the stores and also in the way you communicate to consumers, mainly through mannequins and shop windows and stuff like that. We are absolutely sure that by adding these brands to the platform of ASOS, they're going to get great benefits. And this is going to unlock a great growth potential for them. On one hand, because we think that by adding them to our approach into fashion, we're going to release them for -- and to give them an additional power to grow in the sense that, for instance, we truly believe that in today's world, the connection to fashion is not only through the catwalk. As Vanessa was explaining before, there are connections in all cultural relevant events. And we really want to exploit that and make a connection between this way of creating fashion and the final assortment. And we want to do that through the lenses, as I said before, of sustainability and inclusivity. These brands have to be sustainable. They are going to be sustainable, for sure. And they are going to be inclusive. We're going to widen the range of kind of sizes and body types they cover. But not only that, the fact that they are going to be part of the ASOS family and the ASOS platform is going to give them greater capacity to grow in the sense that it's going to make more flexible the product approach. And for instance, if we see that there is a trend within a specific series in Netflix and that comes into flower dresses, maybe there is a collection that is only flower dresses, because it will not be subject to the limitations of a physical store offering and the physical assets of a store. Same with the connection with consumers. We will be able to connect with our capacity to connect on social media, on our pictures and our regional language. And we are absolutely sure that all this is going to give these brands much more traction and an additional capacity to grow. And it was not unknown to most of you that these brands were more or less in the territory of GBP 1 billion altogether. And then why not dreaming or having the ambition that they could go back to this territory with us. We are certainly sure that with all this, we will be able to achieve that very, very sooner or later, hopefully sooner rather than later. So if you want to put a little bit what we've been saying with you in a nutshell -- and we can move on. Pretty much today, we were trying to share with you why do we think that ASOS is a unique approach or a unique value proposition for consumers, knowing that ASOS is this fashion destination for 20-somethings. Well, we are a destination. So the first thing is that we offer a complete assortment as other destinations, but what makes us different is that our assortment is unique and not replicable. For 2 reasons as we shared. First, because we edit. We curate the offer of the main international brands, but also because we complement that with our own brands. And that makes a set that is absolutely -- nobody can copy it or replicate it. And actually, the fact that we have added lately brands as iconic as Topshop, Topman, Miss Selfridge and HIIT only comes to reinforce this unique proposal to our consumers. The second thing is that we give a unique view of this proposal to the consumers through the eyes of our visual language. And we've seen that this is very appreciated not only by our consumers, but also by some of the most iconic brands like Polo Ralph Lauren or Adidas. They are really liking the way we're doing it, and I'm sure not only liking. They're seeing the benefits of that, and they are reinforcing this connection with us. And finally, we do all that through the lenses of these core values of sustainability and inclusivity. And again, let me repeat that inclusivity in the sense of including all body shapes and sizes and trying to be the ultimate and more democratic approach into fashion. So we are convinced that all these puts together a unique and differential experience. This is the ASOS experience, and we are convinced that this is the key of our traction with consumers. And with that, I think we can move on into Q&A.

Thank you, Jose. Now we've got a Q&A session. We're going to follow the same sort of process we did at the half year results. So if you got Zoom downloaded, you can ask your question in person, that is, by the video link, by clicking the Ask Question By Video box underneath. And if you don't have Zoom, you can send a written text question in under Question Via Text. So We've got a couple of questions in already. The first one is from Anne Critchlow with SG. And it's, what's the potential of sales now coming from exclusive products designed with third-party brands? Nikki, do you want to take that one?

Yes. So 40% of our sales come from our ASOS owned brand portfolio. And then in addition to that, within our branded portfolio, around 15%, 1-5, of our sales come from a product that we have co-created and collaborated on brands with. That might be full ranges or that might be exclusive sizes or exclusive styles that we've worked with them on.

Brilliant. Thank you. Next question from Sherri, RBC. What have been your learnings over time in brand selection? How do you keep the number of brands stable at 850, and what is the right level? Do you want to take that one, Nikki, again?

I can do. We allow the customer to dictate which brands we sell on site. So our teams are constantly researching globally in terms of the brands that we think are right and the brands we think are relevant. But the number has just stabilized at that level. As I said, we onboard around 100 new brands every season, but we also exit brands that we no longer feel are relevant. So it's very much driven by customer and customer demand.

Yes. So on that one, Sherri, you know it's in constant churn. It's not the static 850. We're always rotating, always bringing in new and keeping it fresh. Right. Next one is Charlie -- Charlie Muir-Sands from Exane. How does your private label gross margins compare to third-party brands? So the answer is around about 7 percentage point differential on average on the gross margin level. And what's the scale of markdown opportunity from faster sourcing? Great question. The answer to that one is get the price right, respond quicker, reduce markdown, agile wins, but also product quality, design, selection also win. So the faster, the better the markdown opportunity. We're not going to quantify it, Charlie, but I think you get the point. Michelle from Berenberg. What's the benefit of having ASOS brand as part s of the same company on the ASOS platform? Would you ever spin them out into 2 separate entities? Vanessa? It's like giving away your children. Is it?

Yes. Exactly. I think we're always open to the opportunities, but I think ASOS is a key brand on the platform. And as we've talked through today, we offer something different to any other platform or any other brand. And I think that's the main thing to focus on.

Yes. So let me have another go on top to build on that, Michelle. The ASOS experience is anchored by ASOS Design product. And it's more agile. We can be braver with it. We can experiment wall with it. We can be short on lead time. And it's one of the elements we know our customers love us for. And it's unique. It's only available with us. And it's pivoted over time in many different directions. So in terms of spinning them out, I very much doubt that one, Michelle, but thank you. Next one, Rocco. With the share of ASOS own brand scaling up almost 50% now, what holds you back to sell ASOS brands throughout more online retailers such as Zalando, Boost, et cetera? A little bit -- let me go with this one, a little bit of what I've just said to Michelle, Rocco. We like the uniqueness. It does create a moat for our offer versus others, but we never say never to some of these things. You have noted in the results presentation a couple of weeks ago, we talked about building a powerful relationship with Nordstrom, particularly anchored around Topshop, Topman, HIIT and Miss Selfridge. And we might experiment in North America with an edit of some of the ASOS Venture brands in North America to drive a more compelling experience for both the customer in North America and drive more eyeballs to asos.com in North America. So thank you, Rocco. John, how do you -- John Stevenson from Peel Hunt. How do you think about the prospect giving brands more control over range selection and potential for direct ship? Shall I give that one too? Do you want to talk about the edit first of all?

Yes. I mean I think that ultimately is definitely one of our differentiators, branding through the ASOS 20-something lens. We talk to brands. We're collaborating with them constantly and understanding their essence, but it's really important that we have a unique selection from them. The opportunity in terms of direct ship gives us more potential in terms of depth and availability of products, but the curation is all important.

So the -- you will see -- you'll remember a couple of weeks ago, John, we talked about ASOS fulfills. There's 2 elements with our virtual fulfillment. The first one is any warehouse to any customer, optimizing around availability and, therefore, our working capital and stock pool. The second one is optimizing our third-party brand stock pool around availability. And if we haven't got it in the size or color and our partners have, we'll transact on the ASOS Design platform and allow our partners to direct ship to the customer. So we see that as a big part of the future platform development. Right. I'm going to go to video now. I'll come back to the text questions in a second. Mike Benedict from Berenberg. Let's see you, Mike.

Hopefully, you can see and/or hear me. Just one from me. I was interested to hear if there are any learnings you've taken from how the Topshop brands design product, et cetera? And whether you've taken them over to your own brand portfolio?

Sorry, any learnings from the Topshop design?

From how Topshop do things, yes, in terms of designing their products, et cetera?

Vanessa?

I think the main thing is, as Jose touched upon, is the Topshop were very much kind of limited by the bricks-and-mortar model. And I think that's the biggest difference we've seen as they've come over is getting them to work more in the online way. So it gives them a level of freedom that they probably didn't have with bricks-and-mortar. So it just means that they can really make sure that they're focusing on their customer rather than being restricted by a store space. So I think from a product point of view, it's actually really exciting. And I think it's going to give like the Topshop brands loads of opportunity to really drive the brand forward and in terms of our future ambitions that they just wouldn't have been able to get to with bricks-and-mortar.

Jose, do you want to add anything to that? Or you're happy with that answer?

Yes. I'm happy. The only thing I would add is I think that from a supplier point of view, we have also -- it has also helped us to discover a wider selection of suppliers. And I think it's going also to help us on our own selection of suppliers for the rest of the ASOS brands. So I would say that there were some interesting learnings there.

Okay. Any follow-on, Mike, or is that okay?

It's all good for me.

Thanks, Mike. Okay. One more video. Simon Bowler from Numis?

I hope you can see and hear me. 3 and a, maybe, half questions, if that's okay. First one being -- and apologies, my connection went for a little bit, so sorry for any of the these have already been answered. But I think you mentioned on sort of medium-term view of where that moves to, directionally or otherwise. Secondly, you mentioned kind of Topshop seeing triple-digit growth. Can you just clarify on what base that is? Is that Topshop sales through ASOS last year? Or is that versus kind of Topshop so on kind of e-com sales base? And then kind of thirdly, the vision, there's quite a bit of kind of commentary in there around kind of virtual sampling and looking to remove physical samples and lead times. How far away is something like that? What is the opportunity there from sort of cost perspective? And is that kind of your own proprietary software you tend to use there or the third-party software systems that enable that?

Okay. Nikki, why don't you pick up the last one? And then we'll go back to Topshop in a second.

Yes. Over the last 12 to 18 months, we have been working on transferring all of our blocks onto digital blocks. That has really helped us eradicate already the number of samples we use in the production process. We have our own in-house ASOS avatars that we fit digitally on. And around the volume of 70% of the product that's made within the supply base, the suppliers have the ability to use that technology. So across most of our short lead routes, we are optimizing and using digital technology to be able to fit and seal our garments. We definitely see that improving going forward. And it's been fantastic to see how the teams have taken up using all of the new technology. It's been great.

And on the cost point, Simon, obviously, the samples are typically 10x the first cost of the finished garment, depending on where it is, can be more. And by minimizing samples coming back from the forge, you reduce lead time, so lower cost reduce lead time. You also improve size and fit, so you can then reduce your downstream size and fit processes during that too, which is increasing agility, reducing returns on the size and fit. Jose, do you want to pick up any points on Topshop. Simon wants to know about triple digit, what that's...

The triple-digit growth is on the ASOS sales. So that's pretty much -- we're more than doubling the sales that we were doing last year. On the digital something I think that -- sorry. On the digital something, I just wanted to stress what you said that I think the biggest benefit is going to be on the time to market and on the quality of the final product. And there will be certain benefit in cost, but that's not the most critical thing. I think the most critical thing is going to be time to market and the improvement that can produce in full price sell-through.

Great. Simon, what was your first question again? Sorry, just remind me.

It was just on kind of medium-term view of where the 45% of unique products may go to?

Ladies?

Again, it's very much driven by customer demand. So we love collaborating with brands. The opportunities that come in front of us are fantastic, and we also seek those opportunities out. So if the design team are really focusing on a specific customer moment or something that we know is building as a trend, we will actively go out and approach either brands that we currently work with or brands that we don't yet work with or even considering celebrities influencers within that. So there are numerous opportunities for us to build and co-create with people. But again, we let the opportunity and the customer drive the demand there.

Going ahead. Vanessa?

I mean we're always looking for new opportunities. And like, as Nikki said, it is all about like customer driving the demand and what we should be doing. We have done style edits with influencers and celebrities. Last year, we did 1 with Leigh-Anne Pinnock from Little Mix, which was hugely successful. And so yes, something that we're always looking at.

It's always part of our armory. And the year before, we did a couple with Ovie Soko of Love Island as well. John Stevenson. Can you talk more about your test and repeat approach? What's the minimum order quantity and on what proportion of ranges do you employ test and repeat? Do you want to go with that, Nikki?

Yes. So it really depends on the product category and product type. So for example, on our jersey dresses, up to 60% of the offer that we have is on a continual cycle of test, learn, repeat, of the foundations in place, to be able to go as quickly as possible when we see styles starting to react and things start to shift and change in the market. As I said earlier, it's also really important, though, for us to build as much flexibility into all product categories. So this -- in the last 12 months, we've opened up new sourcing routes for footwear. We now have footwear sources in Italy, Portugal and Spain, which enable us to trade that product really hard in the season. So it's definitely about ensuring that we're listening, watching and reacting using insight and analytics to be able to push the ranges forward with that knowledge.

Great. Thank you. Simon Irwin. Question is what data do you share with the third-party brands? That's probably you again, Nikki.

We have a wealth of data, obviously, at our fingertips and win terms of looking at the sales performance. Obviously, that's something that we share as standard, but also there is a huge amount that we use internally to be able to push the ranges. And where we talked about being able to collaborate and co-create, that's very much about surfacing opportunities that we're seeing through in insights and sales data. So it's a collaborative approach in terms of the information that we're surfacing to create real excitement going forward.

Okay. Thank you. Next question from [ Florian Rene ]. What are the economics of co-creating a style, a range of products with third-party brands? And when did you sell co-created ad-hoc product? And what are you -- are your margins higher? Some of those you can answer, Vanessa. Go for it.

How we -- I'll answer about the margins?

I think that's probably the one we can't.

Yes. That's probably the one we can't.

You can do the why, on co-creating?

Again it's just making sure we create those really authentic products for our customers. So if ASOS Design -- the design team identify a trend that we think is really key for the sportswear brands, we know by doing it with those brands, with their logos, it adds a level of authenticity that you just wouldn't get with another brand. So that's why we do that like co-collaboration. And our customers love it. It works really well, and we definitely want to do more in the future. I'm speaking to the sports brands next week. I'll be representing our version of autumn/winter '22 trends to them.

Maybe Icy Park is an example of what that did for traffic as well.

Yes. I mean, yes, so Adidas IVY PARK has been incredible. So the last drop of the Beyoncé collection was Icy Park, and it's been amazing. We saw incredible traffic, particularly from the U.S. So we know that we can do these types of collaborations and they can really resonate with the customer.

Okay. Next question, how much do you expect owned brands to account for of the mix in 3 to 5 years from now? I can't say you answer that question, just go down a bit. That's an anonymous question. So I'm going to decline that one. You know I don't give out that mix. I can tell you both are going to be substantially bigger as a quantum. Michelle, Jose, Vanessa, Nikki, which ASOS brand are you most excited about on a 3-year view and why? This will be interesting. And is there anything -- any product or brand do you think is currently missing? Let's see how we all go. Jose, you first. Which ASOS brand are you most excited about and why?

Fair enough. I'm excited about all of them, but if I have to select one, I would say, Collusion. I think Collusion is right on the spot in terms of cultural trends and also in terms of shaping and pricing. I think it's a brand that has an amazing future. And I would bet my hand that is going to become a very relevant brand in the retailer in the coming years.

That's a good answer because it's currently the top 5 -- in the top 5 most searched for brands, which is a good answer. Vanessa, which one are you most -- which one of the things you've designed you are most excited about?

I mean, that really is like picking my favorite child. So for today, my favorite child -- I think probably LEGO carriers within ASOS Design because I think there is so much potential within -- like I say, we really spot the trends and what's going on in the market and where the opportunities are. So I think it's something that we can definitely evolve, and I think there's lots of potential there.

Nikki?

Also super excited about Collusion, though I think we have to say ASOS Design as well. Just the share, size, scale, creativity of that brand. There are a huge amount of people that work on it. We have numerous teams with product category knowledge. And I think we're blown away every single season when we sit down with them and they just bring to the table so much newness, excitement and passion for how they can move their collections forward.

So I'm going to ask the what's missing in a second. Michelle, I'm really excited about Collusion too. But actually, I'm also excited about the bounce back in ASOS dresswear. And I think as you is going to be another significant milestone and will follow Collusion as well, both of which will be exciting brands in our offer, right? What brands missing? Jose?

Well, that is a question. If I could add a brand for it, I think this is the next -- if you want the next territory where we really need to become and establish a relevant presence with our own brands.

Good. Nikki?

Well, I mean, the great thing about what we do is we have the total view of the kind of global fashion landscape. So we have identified quite a few areas that we would love to develop brands into. We talked quite a lot today about inclusive sizing, and we absolutely think there's opportunity in an inclusive size of plus-size brand. We know when we're going out and looking for opportunity in that space the right brands don't exist in the volume that we'd like them to. So we definitely think there's opportunity there.

Okay.

Yes, but we picked that up within ASOS Design as well. From a product point of view, I think it's all about like future opportunity. We know what our Gen Z customer is looking for in terms of the future. So we've got loads of ideas on things that we'd love to develop in the future. I'm not going to say what they are.

Okay.

They are top secrets.

I'm going to keep my powder dry as well. So I think summing in sportswear, summing in global fashion, one Spanish one, one Scandinavian one would be a nice addition as well. Right. Let's move on to the next question. Anne Critchlow. What percentage of buy for post-lockdown spring/summer relate to lockdown popular categories? And how does that compare to pre-pandemic? Jose, do you want to take that one?

Sure. Well, I think that we have seen an amazing shift in the behavior of consumers, and the amazing thing is that we have been able to react accordingly. So it has been a fantastic shift from dresses, which was our star category before the pandemic into the more casual categories that right now are -- it's difficult to quantify how much because if you include all sports into the casual category then it's absolutely massive, but it was already big before. But I think it has certainly become the epicenter of our activity right now, casual, and the teams have reacted accordingly. I don't know, Vanessa or Nikki, if you want to elaborate more on that?

No, I think you got it covered. I think we just -- I talked about in the presentation that it's about going back to those snapback categories, so light dresses and true going out, but also maintaining those elements of the things that our customers did love in lockdown. And we just feel -- because we do understand that customer so well. We think they are going to really want to strike a balance. So lots of those categories that we've seen grow, we believe will continue post pandemic.

Very good. Next question from Alvira Rao from Barclays. Big picture. Is there any ambition to broaden your target audience as cohort age, e.g., 20-somethings becoming 30-somethings? Right now, we are laser focused on 20-somethings, which actually means plus or minus 10 years, and it always has been. And so if you look through the ASOS demographics, ASOS is 70% under 30 and has always been 30% over 30. So no plans to go any higher at that demographic right now. Simon Irwin, another question. The Arcadia brands have increased own brand range up and down versus ASOS Design? Could further transactions extend this or would you be looking for new categories? Nikki?

Well, obviously, in terms of any transactions, it would all be about making sure that, again, we're just understanding responding. We've got a great handle on the areas that we're really excited to grow and develop in terms of the new brands. Differentiating that from our existing portfolio is really, really important. And bringing the key core pillars that Jose spoke through in terms of inclusivity and sustainability to the heart of that offer is really important to us as well.

I think you also mean corporate transactions or brand acquisitions, Simon. So you remember, Matt and I said a couple of weeks ago, that we won't rule out any further acquisitions of brands. And to achieve our mission, it's highly likely we'll do that. But actually, the bar has got to be high. It's got to be a relevant brand. It's got to be 20-something focused. It's got to be something that will resonate with our customer. In terms of other categories, it's something for us to discuss about stretching the Topshop brand as well, maybe Topshop beauty or something like that. But those are all ideas rather than plans right now. Tony Shiret from Panmure Gordon. Sorry, the question is just -- here we go. Do you have a lead table of suppliers? 100 out of 850 leaving every year seems a high number. What criteria do you use to remove suppliers? Nikki?

We have an in-house tool that we call our brand relevance detail. So it looks at over 100 different dynamics actually in terms of the way in which we assess the performance of our brands, not just in terms of the traditional metrics, but also understanding what the target age range is and what their age range and demographics, the customers are coming through, where the global sales lie, many, many different criteria that mean that we can assess across the portfolio and understand which are going to be the most relevant brands going forward for the customer.

There you go. Thank you. Another question from Charlie. Would you consider a developing a brand for over 30s and 40s, like you, perhaps on a separate website, given your tech product and marketing capabilities? Never say never, Charlie. It's not our core target, as I said earlier, but you can still enjoy ASOS Design anytime you like, Charlie. A question from Ben Hunt, Investec. In the past, ASOS Design has struggled. What were your lessons you've learned from the past? Vanessa?

I think from a product point of view, it is just always having the customer at the heart of everything we do. So just really focusing on that 20-something, really focusing on every single moment of their life. I think that's the most important thing and the thing that we've learned.

I'll point out, Ben, too, that 12 years ago, ASOS Design was about GBP 60 million. And this year on the expected numbers for the year, it would be GBP 1.6 billion. So growth is never a straight line. And so I think that's a pretty good growth on ASOS Design. Simon Bowler. With the early learnings and momentum in Topshop, how are you thinking about SKU breadth for the brands relative to ASOS Design? Vanessa?

I think we're obviously still working through it, but I think the SKU breadth would be smaller -- I don't think it would ever be as big as ASOS Design as we sit here today. I think Topshop has a smaller customer range in terms of the segments that Jose talked through. So we are really kind of laser-focused on certain types of customer on Topshop. And I think that's really important to make sure that we keep ASOS Design and Topshop really different. So we have a real focus on that customer base. So I don't think the width would ever be as big.

Just as a broad size, Simon. ASOS Design is about 45,000 SKUs, Topshop's, what, 5 -- 4, 5, something like that. So it's currently 10% of the width of ASOS Design. Next question from [ James Sully ] from HSBC. It's not product related. What's the future of working at ASOS hybrid models working from home, et cetera? I don't know whether you're looking for clues, James, but we're looking at a dynamic working pattern whereby we'll never be 100% back in for the whole business like we were, but neither we would be 100% at home, thankfully. So we're going to do a new dynamic model team, objectives first. And so we'll try to work that one out. We just signed off as an exec. We're going to start the experiments over the coming months. Andy Wade. You talked about ASOS being a cool place to hang out, highlights the importance of experiences. Is there anything more you can do here on site or in-person events? Good question. Vanessa?

I mean, again, it is all about the customer. So we'll let the customer kind of drive that. On site, we're always looking to see what we can do to improve the like customer experience. particularly with the different types of brands that we have. So whether that be the sportswear brands or the ASOS Design brands. So yes, something we're always looking at.

Yes. A couple of extra things on that, Andy. We know customers love the money can't buy behind the scenes look. We know they like the sneak peek. We know they like the influencer lounge, the influencer room. We know they like to engage with the people who design and buy the garments. So we just need to dial that up a lot more. We've done it sporadically. We think that's something that customers will really value and we should do more of. Right. No one else on the video. No one else on the text. I think that's it. So listen, guys, I appreciate you dialing in. I hope you find it informative and interesting. Thank you very much, Jose from Porto. Thank you very much, Vanessa. Thank you very much, Nikki. I look forward to speaking to you all soon. Thanks, guys.