Asos has introduced a £200 million one-off impairment cost after deciding to mothball its main US warehouse close to Atlanta, Georgia, in a transfer designed to chop prices and increase profitability.
Later this yr, the net vogue retailer’s American clients shall be served from its automated UK distribution centre in Barnsley and a smaller, extra versatile facility within the US.
Closing the Union Metropolis web site is anticipated to extend Asos’s pre-tax earnings by £10 million to £20 million from 2026, though it’ll additionally end in a £190 million impairment this monetary yr. The information despatched Asos’s shares up by 6.5 per cent on the day, regardless of a greater than 85 per cent decline over the previous 5 years.
Whereas Asos’s US arm has remained worthwhile, the corporate acknowledged that neither American demand nor inventory ranges might justify maintaining a large-scale warehouse. Competitors has intensified from fast-fashion challengers Shein and Temu, with rival Boohoo additionally retreating by shutting its personal US web site. In response to Asos, its plan to service stateside clients from the UK and a smaller American facility will enhance product selection and cut back fulfilment prices, although buyers will expertise slower supply occasions.
Asos stated solely seven direct workers are affected by the closure, with logistics companions aiming to redeploy a whole bunch of employees to neighbouring websites. This transfer follows a collection of “medicinal” actions prescribed by chief government José Antonio Ramos Calamonte to stem losses and reset the retailer’s enterprise mannequin. The technique emphasises decrease inventory ranges, fewer reductions, and a ‘test-and-react’ strategy to stock.
The shuttered Union Metropolis warehouse was first opened in 2018 beneath former chief government Nick Beighton, who seen it as a landmark funding for Asos’s North American enlargement. Analysts at Panmure Liberum counsel the closure indicators “an acceptance of lowered long-term ambitions” for Asos within the US. Others, like Deutsche Financial institution, nonetheless see “a large opportunity” for worldwide progress in each the US and Europe, the place Asos retains native infrastructure.
