ASOS shares dive as profits take a hit from cost of growth

By Neil Maidment LONDON (Reuters) – Shares in British online fashion retailer ASOS plunged to a five-year low on Tuesday after the firm said it would increase investment in its warehouses and IT systems to meet increasing demand at the expense of short-term profits. Founded in 2000 by chief executive Nick Robertson, ASOS has been the success story of British retailing in recent years with its fast-changing fashions snapped up by Internet-savvy twenty-somethings, attracting fans such as singer Rita Ora. To help cash in on rising online demand, the firm said on Tuesday capital expenditure would increase this year to at least 68 million pounds ($113 million) from 55 million as it steps up investment in IT and in its British and German warehouses. The investment, which will help speed up deliveries and cut costs, will push the firm’s annual sales capacity to 2.5 billion pounds within a year, ASOS said, more than 1 billion pounds higher than previously guided and more than treble the 769.4 million pounds it achieved in the year to August 31, 2013.