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UPDATE 2-ASOS sees Denmark's Bestseller as potential buyer

Published 01/19/2011, 06:29 AM
Updated 01/19/2011, 06:32 AM

* Danish supplier Bestseller has 18.3 percent stake

* ASOS sees FY profit in line with market expectations

* Q3 retail sales 100 million sterling, up 59 percent

* UK retail sales up 23 percent, international up 156 percent

* Shares up 3.6 percent

(Adds detail, CEO, analyst comments, shares)

By James Davey

LONDON, Jan 19 (Reuters) - British online fashion retailer ASOS sees its Danish shareholder Bestseller as a potential buyer for the company, whose buoyant trading has attracted takeover speculation.

Last year Bestseller, which is a major supplier of ASOS, ruled out a full offer for the firm, but has continued to raise its holding, currently 18.3 percent.

"They did (rule out an offer) a couple of months ago but times change," ASOS Chief Executive Nick Robertson told Reuters in an interview on Wednesday after the firm posted strong Christmas trading.

"They're big admirers of our business, they're in our space, they're a young fashion business, they're global," he said.

"(But) they're not big on the internet. If the internet's for the future then why wouldn't they want an increasing part of our business? It makes sense."

Shares in ASOS have more than trebled over the last year, fuelled by buoyant trading and speculation the firm could attract a bid from companies as diverse as Bestseller, U.S. internet giant Amazon and Tesco.

The stock, 10.4 percent of which is owned by Robertson, was up 3.6 percent at 1,606 pence at 1026 GMT, valuing the business at 1.18 billion pounds ($1.89 billion).

INTERNET SAVVY WOMEN

ASOS targets internet-savvy 16- to 34-year-old women looking to emulate the designer looks of celebrities like Kate Moss and Alexa Chung, but at a fraction of the price. It forecast year profit in line with market expectations after sales growth accelerated in its third quarter.

It said retail sales rose 59 percent to 100.0 million pounds in the three months to Dec. 31, stoked by demand for 60's shapes, shift dresses, peacoats, jumpsuits and faux-fur items.

That compares with a rise of 50 percent in its first half.

The firm said UK retail sales increased 23 percent to 56.3 million pounds, with a hit from snow disruption estimated at 3-4 percentage points.

International sales jumped 156 percent to 43.7 million pounds, helped by the introduction of United States, French and German websites in October 2010 and a free global shipping offer in the run-up to Christmas.

Numis analyst Andrew Wade maintained his year to end-March 2011 pretax profit forecast at 26.8 million pounds.

"The continued rapid advance of international once again demonstrates the vast global opportunity," he said.

International sales now represent 44 percent of ASOS' sales mix, up from 37 percent in the first half.

Robertson said he was confident about the future despite the grim economic outlook in the UK.

"Nobody's saying it's not going to get tougher in the UK, of course it is. But the opportunity for ASOS is to internationalise very quickly," he said.

"The key stat that makes us get out of bed in the morning is that the UK is 3 percent of global internet traffic, so let's focus on the 97 percent where the opportunity is."

A Chinese website is expected to be launched within four months and Robertson expects up to five other country websites this year.

FACTBOX-How UK retailers fared over Christmas

(Editing by Paul Sandle and Erica Billingham)

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