Boohoo Attempts to Quell Investor Fears After Asos Shares Plunge

Online fashion retailer Boohoo was forced to issue a statement reassuring its shareholders after a 12% fall in its share value.

Boohoo's drop in share value was prompted by its major rival Asos, whose shares plunged nearly 38% in early trading after it issued a profit warning for the year.

However, Boohoo has now taken measures to calm investors' nerves, saying everything was still going to plan.

"The Company can confirm that it continues to trade in line with expectations for the full year to February 2015. Further detail in this regard will follow within the Company's preliminary results and Q1 trading update announcement on 12 June," a brief statement from the Manchester-based brand said.

Asos stock price sank to 2,830.00p as hefty investment, from previously announced expansion plans, is tipped to hit the group's overall profit margin for this year.

"Whilst our profit performance for this financial year is not what we had hoped for due to an unusual combination of factors, our accelerated investment in technology and infrastructure to support our £2.5bn (€3.1bn, $4.2bn) sales ambition is progressing and capital expenditure remains within guided levels," said chief executive Nick Robertson.

Asos Chief financial officer Nick Beighton said full-year pre-tax profit will be around £45m, after lowering margins.

Last year the retailer posted pre-tax profits of £54.7m to end Aug 2013.