Asos has come a long way since it was founded in 2000 as As Seen On Screen, the destination for clothes and other items seen in films or on TV. Early on, its co-founder, Nick Robertson, the great-grandson of Austin Reed, saw the opportunity to branch out into selling own-label and third-party branded fashion. The business snowballed: in 2016 Asos had turnover of £1.4bn.
Robertson met Sarah Curran at the Drapers Awards in 2007, when she was still at the helm of My-Wardrobe, the premium fashion pureplay she founded. The two bonded over their shared business interests and sense of humour, and became firm friends – they often socialised in London bars with Lauretta Roberts, then editor of Drapers. At the time there were only a few fashion pureplays, so, as Robertson puts it, ‘It made sense to hang out.’ He would tease her about the relative sizes of their businesses. Curran left her job as managing director of Shop Direct’s premium etailer Very Exclusive in July; Robertson stepped down as CEO of Asos in 2015, although he still sits on its board. On a hot summer’s day at a central London restaurant, they discuss the highs and lows of building an ecommerce business in the early days.
Sarah Curran: When did Asos go from As Seen On Screen to the fast fashion, own-brand world it’s now famous for?
Nick Robertson: It just kept evolving. Back in the day, we sold everything – stuff we were proud of, stuff we were not proud of. That was driven by necessity: we needed to create revenue, generate sales and keep the whole ship afloat. Lorri [Penn, who joined Asos as a buyer from Arcadia Group in 2000] was on board at that point, so she brought the Topshop fashion angle in, but that was still only 5% of the mix.
We decided to follow the pound. Fashion had a higher margin than anything else, and own brand had an even greater margin. We couldn’t do it overnight, as that would have had an impact on the numbers, so we let fashion build slowly. That was a three- or four-year process. We used to go down to Topshop at Oxford Circus and say, ‘This is what we need to be.’
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SC: You were a massive pioneer in that space.
NR: Yes and no. The pioneer was Amazon and, in the same way that we spent our afternoons walking around Topshop at Oxford Circus, we spent our mornings looking at Amazon and saying, ‘They’re just filling up the shop – they’re filling it and filling it up.’ It defied all retail logic. I remember that, over a period of time, the more products we added, the more the sales went up. We used to do a calculation: we’ve got 10 departments, there are 20 products on each page and nobody looks past three pages – that’s 60 products per department, 600 products. Now there are 80,000.
People were saying: ‘Online shopping’s never going to work. It’s a fad.’
Sarah Curran
SC: When did you go on to [the London Stock Exchange’s junior market] Aim?
NR: In 2001. People go: ‘Why, how, what?!’ It was a fledgling business with very little revenue, floating on Aim at a time when it [dot.com] had all gone pear-shaped – why? The simple answer is that my brother put in half of the original £2.8m [to establish the business], and his mates put in the other half. A condition of the money coming in was that we had to be floated. That was the investors’ exit. So it wasn’t a conscious choice – it was part of the fundraising.
For the first three or four years we thought, ‘What have we done? We’re in a floated company, our results are rubbish, and sales aren’t great.’ It was bloody stressful – we had no money and we couldn’t go back and raise any more. So we just had to make it work.
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We ran it on an absolute shoestring; we didn’t pay salaries for a month. Nobody else in the space operated like that
Nick Robertson
When we first went on Aim, we merged my marketing business with Asos, so at least we were presenting revenue figures – unlike any other dot.com fledgling. That’s what saw us through. And then there were advantages of being on Aim: we’d raised our money and never had to go back for more. We ran it on an absolute shoestring; we didn’t pay salaries for a month. Nobody else in the space operated like that. They were spending more than they were making and constantly having to raise. We were never distracted by that. There was no expectation of a profit either, so we could plough any surplus back into the business to grow it. And because we were on Aim, it meant quite early on we had to tick a lot of boxes that other start-ups didn’t: we had insurance, we had a plc board. The business was built on concrete from day one.
SC: At the time people were saying: ‘Online shopping’s never going to work. It’s a fad.’
NR: They just got their fingers burnt badly. There wasn’t an appetite to invest in ecommerce for a period of time, and that period happened to be 2002 to 2007. Meanwhile, we were building Asos and trundling along.
SC: I think there is a myth that online is a cheap version of retail. A lot of people underestimate how much it costs.
NR: The early perception was: blimey, you’re selling stuff, you’re getting a retail margin, but you don’t have stores, so you must be more profitable. That’s why the early valuations were what they were. But then people realised there was a lot more to this ecommerce than meets the eye: it requires a huge investment in technology, in logistics. Oh, and the stores have also got to do it, so not only do they have the cost burden of their stores, they also have the cost burden of doing all of this – which, by the way, is a lot more expensive than we first thought it was. That was a hard pill to swallow [for bricks-and-mortar retailers]. There was a tough five years, but roll it forward and those retailers can now reach global customers.
It defied all retail logic. I remember that, over a period of time, the more products we added, the more the sales went up
Nick Robertson
SC: For you, knowing your customer – what she or he needs – has been central to your success. Is there an Asos mission statement or ethos?
NR: If you look at Tesco, bar the recent two- or three-year wobble, that was a 20-year journey of going from being the underdog – it was the fourth-biggest supermarket chain in the UK – to the biggest by a country mile. And part of the beauty of what they did was their customer-centricity. ‘Every little helps’ is still genius, whichever way you look at it, and that mantra spreads right the way through the organisation. That’s what we tried to do, much as my fashion lovelies hated it when I started citing Tesco in the office. There was also a period when we saw a slowdown in the UK. We were down to single-digit growth in the UK and we were thinking, ‘This cannot be right – without doing too much, the fair wind is growing at 15%. How can we be in single digits?’ And we realised we weren’t clear in our proposition – we had £400 handbags on our site, but we’d decided to focus on twentysomething fashion, nothing more, nothing less. And guess what: 0.1% of twentysomethings can afford £400 handbags. So they were out, gone.
SC: Quite often with founders and their brand, there comes a time when you don’t know who’s leading who. Your brand becomes this monster that’s pulling you along on the journey. Did you have those moments?
Photographer: Roger Bool
Sarah Curran and Nick Robertson
NR: I remember it changed – gradually, not overnight – from just doing our own thing, running our business, to suddenly you’re in the spotlight and everyone wants to talk to you. The Daily Mail is at your front door and you think: ‘How did that happen?’ I was quite glad to put that aside.
SC: Did you hate that spotlight?
NR: Yeah, but my mum liked it – she’s got a big scrapbook.
SC: What’s the best piece of advice you’ve received?
NR: It was more inspiration. I was lucky: someone else – Amazon – spent a lot more money building their website, and I was just looking at that and going, ‘Guys, just give me that.’ We were lucky that the UK fashion scene is unparalleled. I don’t profess to be a big fashion person, but I’ve walked up and down global high streets and I’ve never seen the variety we’ve got in London. The rise of Topshop, River Island, New Look – these guys are phenomenal at what they do in terms of young fast fashion. How lucky that we could hire people from those companies! It was like having a third-division football club that could easily get first-division players to come and work for you, and suddenly you were operating at the same level as they were.
SC: Is there anything you would have done differently?
NR: I would have spent more time recruiting. I’m a bit of a laughing stock at Asos: my recruitment policy was ‘Right, can you start tomorrow?’ We needed to get bums on seats to get things done. But then we had defined job roles, with job specs. I didn’t have enough experience in big business to appreciate or understand the significance of that.
There comes a time when you don’t know who’s leading who. Your brand becomes this monster that’s pulling you along
Sarah Curran
SC: Did you ever have a coach?
NR: We did. It was classic. I said: ‘Why do we need a coach? Don’t be ridiculous. All that consultant garbage.’ But we had an HR woman who said: ‘Look, this isn’t the most functional management team I’ve ever worked with. I know somebody who might be useful to you.’ We all frowned, me particularly. But she persuaded us to give it a go, and we did, and that was a galvanising moment, getting everybody talking. I think sometimes you need that – but it feels like admitting defeat.
SC: No it’s not. We all need to develop – the business develops, but also you as a founder or as CEO. Otherwise you become the thing that holds it back. There’s also that inner confidence you need to keep having. That’s what keeps that fire, that momentum.
NR: Yeah, it’s a slightly double-edged sword. And I now get it – sometimes you need an outsider to come in, get the carcass on the table. But it can tip from being useful to a bit of navel-gazing.
SC: How did you adjust after stepping down as CEO?
NR: If I’m totally blunt, I would die for that business, but it spent me. Now I can love looking at it from a distance, but the energy required to run that flat out – I just haven’t got it in me.
SC: Building a brand like that takes stuff out of you without you even knowing. Have you had any thoughts on what you might want to do next?
NR: Luckily, I’ve had this slow transition out. I’m still on the board. For me personally – and I’m sure lots of people would have different views – I’ve done business now. It’s a big part of life and it makes the world go round, but I don’t feel the need to rush back. I have three young kids. The biggest regret you hear from every dad is they didn’t spend enough time with their kids. I can do that in spades.
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