Important information: The value of investments and the income from them, can go down as well as up, so you may get back less than you invest.

What do you do if you’re in your 20s and in the midst of a pandemic. It’s not something that any of us over the age of 30 will ever have to find out for ourselves. But ASOS the online fashion retailer knows exactly what. You shop.

Some 3.1 million additional locked-down fashion-conscious shoppers have flocked to the ASOS site and shopped like never before, giving it 23.4 million active customers and sending pre-tax profits soaring by 329% to £142 million for the year to 31 August.

And with this being a pandemic, the impact is being seen globally. Strong sales growth was reported group-wide, with the UK up 18%, EU up 22%, US up 18, and the rest of the world up 18%, pushing revenue overall 19% higher to £3.3 billion year-on-year.

Looking ahead, the company said it was well-set for peak trading, with warehousing capacity operating at normal levels. “We continue to foresee headwinds to consumer demand, which will not abate until lifestyles and financial stability normalise for our 20-something customer and we expect the disruption to global product supply will be felt into 2021,” it added.

As an investor, picking the winners and losers has proved to be increasingly difficult the longer the pandemic goes on. ASOS is evidently a winner, and there have been clear losers, such as the travel and airlines sector. The likes of ASOS show get your operating model right and you can do more than survive - indeed thrive - while full-on lockdown shutters the high streets and shopping malls. But the longer the pandemic goes on, the weaker the notion that things will ever ‘normalise’, as ASOS puts it.

At the start of the pandemic, the ‘new normal’ was touted around and sort of cheerily laughed off as something scary but transient. The over-riding notion being that one day we would get back to ‘real life’.

But now in October and with no sign of this being over any time soon, the old normal is starting to look like it’s in the past and increasingly, pressure is mounting for businesses to stop stalling and possibly accept that things have changed. Forever.

The challenge for the likes of ASOS and co will be to shift with that change. And they know it.

Even now, with sales booming and profits soaring, these thus far 20-something resistant ‘headwinds’ bring with them an unwelcome cold draft. With the second wave of the UK epidemic building, and its 20-oddsomething customer base probably, on the whole, unlikely to suffer more serious health problems from the virus, the knock-on effects of the pandemic on the whole economy certainly could hit them hard.

After all, it is largely 20-somethings who work in retails, pubs and bars and on whom the zero hours gig economy relies. If these jobs start to go, then the likes of ASOS and others which cater for their consumer needs, will start to feel the knock-on effects themselves.

Out of work, locked-down 20-odd-year-olds are not going to spend, even on cost-conscious fashion if they are down in the dumps and out of pocket.

But it goes even deeper than this. When the ASOS management team talks about lifestyles and financial stability normalising, that doesn’t suggest that its biggest threat is losing these 3.1 million new customers (and possibly more) to the high street stores, once ‘hands, face, space’ is long forgotten. What it means is that ASOS has to future-proof itself in the face of those ongoing supply chain disruptions, but also a whole host of hitherto high street/physical store retailers switching to an online model.

Reduced air freight capacity has already forced costs up. And a shift to staying home has meant its once-popular ‘going out’ range has been overtaken by a rise in demand for casualwear. ASOS has started to tackle the changes and says costs will rise to between £170 million and £180 million in the current year as it starts work on a fourth distribution centre that will gradually ramp up in time for peak trading in 2022. The company said it had “learnt a lot” from warehouse problems last year and that it was “confident” there would be no repeat.

ASOS may currently be ahead of the curve, but it cannot afford to rest on its laurels, and its board and shareholders know that.

As investors, nothing can be taken for granted at the moment and, as a result, questions abound. Just what lies in store in the months ahead? Well, Fidelity Investment Director, Tom Stevenson, has some of the answers in his latest quarterly investment outlook, which is published today.

To accompany the report, which you can read here, Tom has also recorded a webcast in which he answers the questions so many of you put to him. Catch that, hear what he has to say and, if you missed the opportunity to ask a question this time around, put a note in your diary for the next one in another three months’ time when I’m sure the questions will still be mounting and Tom will be on hand yet again to give some much-needed answers to your next set of questions.

Get the latest Investment Outlook

Important information: Investors should note that the views expressed may no longer be current and may have already been acted upon. Reference to specific securities should not be construed as a recommendation to buy or sell these securities and is included for the purposes of illustration only. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to an authorised financial adviser.

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