The top-performing Tempus Ten stock last year and darling of the retail sector, ASOS can seemingly do no wrong.

Today’s full-year results mark another milestone for a business that has turned fashion retailing on its head. Pre-tax profits up 117 per cent, gross margins up to 47.6 per cent, average selling price up and average basket size, up.

Sales have now increased by an average 77 per cent in each of the past five years. How the rest of the high street must wish they had thought of the idea first.

ASOS is today far removed from its original business model - offering cheaper versions of the clothing worn by the likes of Kate Moss and David Beckham. It is now a virtual department store, selling its own designs alongside more than 200 labels from French Connection to North Face.

Confirmation today that ASOS will launch an end of season clearance site was widely welcomed by analysts nervous as to how the growth rate of the past can be sustained.

Nick Robertson, the chief executive, admits the group can not be immune to the wider retail slowdown, but half of 16-to-24 year-old girls now do all their clothes shopping online.

ASOS shares are trading on a price-to-earnings multiple of 30 times forecast 2009 earnings, a steep premium to the rest of the sector. But with analysts moving their profit targets up from £12 million to around £13 million for the current year, ASOS is worth holding onto.

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