ONLINE fashion retailer Asos has issued its second profits warning in three months after the strength of the pound hits overseas sales and forced it into a rash of promotions.

Shares slumped by as much as 40 per cent, wiping £1.5bn from its market value, as it said growth in international revenues in the third quarter to the end of May was just 17 per cent, compared to 48 per cent in the same period last year.

The weakness prompted the retailer, which achieves a high proportion of revenues from womenswear, to ramp up promotions.

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The offers were not enough to offset the decline in performance overseas, a market representing 60 per cent of sales, where customers are finding Asos products more expensive because of the strengthening pound, which has risen ten per cent over the last year.

Chief executive Nick Robertson said sales in the third quarter to the end of May were strong, up 25 per cent across the group and 43 per cent in the UK.

However, he added: "Sterling's continued strength has resulted in a slowdown in our international sales growth to 17 per cent.

"We are totally focused on rolling out the Asos business model globally as the world's leading online fashion destination for 20-somethings."