British online fashion retailer Asos believes it can reach its target of £2.5 billion in annual sales by 2020, with price cuts helping to reignite growth after three profit warnings this year.

Shares in Asos, which had lost two-thirds of their value this year following a procession of bad news, jumped as much as 19 per cent today on signs the business was stabilising.

Until this year, Asos had been the great success story of British retailing and a darling of the stock market. Having floated at 20p in 2001, Asos shares hit a high of £71.95 in February.

Asos’s pretax profit fell 14 per cent to £46.9 million the year to August 31st, just above analysts’ reduced expectations but down from the £54.7 million it made in 2012/13.

Though total retail sales grew 27 per cent to £955.3 million, the strength of sterling hit sales growth overseas, particularly in markets such as Australia and Russia.

Chief executive Nick Robertson, Asos’s founder and a 9 per cent shareholder, expects flat profits in 2014/15 and “a small increase” in 2015/16.

“We are in a period of major investment that comes at a short term cost, but the medium-term benefits will be significant,” said Mr Robertson.

Asos also said it had promoted chief financial officer Nick Beighton to chief operating officer. It is now looking for a new CFO. – Reuters