ASOS overtakes Marks & Spencer market valuation

Online fashion giant ASOS officially overtook Marks & Spencer's valuation yesterday in what has been dubbed the high street's "Tesla moment", as a relative upstart business overtakes an industry stalwart.

It had been predicted earlier this year that ASOS, which was founded 17 years ago, was on course to overtake Marks & Spencer in terms of market capitalisation. At the end of August Mark Photiades of Cantor Fitzgerald noted that the businesses were valued more closely than they had ever been with ASOS, at that point, valued at £4.9bn and M&S at £5.03bn.

Photiades said he believed it was only a matter of time before ASOS exceed M&S's value and that it would be a "seminal moment". That seminal moment occurred yesterday when ASOS shares gained 2% taking its valuation to £4.89bn while M&S was just behind at £4.88bn, according to The Guardian.

To put the valuations in context, Photiades pointed out that 20 years ago, when online shopping was in its infancy and before Asos was established, M&S had a market value of £16.9bn. When Asos floated on London's junior stock market AIM market in October 2001, it was valued at £14m, compared with £7.8bn at the time for M&S.

M&S remains far bigger than ASOS (market valuation is based on future profit potential) though it has struggled with profitability in recent years and has been working hard to revive its fashion business. Earlier this month M&S revealed H1 (six-month) revenues up 2.6% at £5.13bn while last month ASOS revealed it had achieved full-year revenues of £1.92bn in the 12 months to 31 August.

The "Tesla moment" is a reference to the moment that electric car manufacturer Tesla, which was founded in 2003, overtook Ford in terms of valuation in April of this year.