ASOS to close UK warehouse

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Troubled fast fashion e-tailer ASOS is set to close a UK warehouse as it looks to cut costs to boost profitability following a tumultuous few months.

ASOS announced a revenue fall of 3% and UK sales down 8% as inflationary pressures and mounting costs increased during the last few months of 2022.

It plans to reduce costs by £300m which will include the closure of three warehouses  worldwide , one in the USA, one in Europe and one in the UK. The company is also rationalising its office space removing 35 unprofitable brands from its online platform and reducing staff costs by 10%.

The company claims that the cost-cutting measures will more than offset the hit from inflation and should facilitate a ‘modest improvement’ in profitability in 2023.

ASOS chief executive José Antonio Ramos Calamonte said: “We are undertaking necessary strategic and operational changes, with our focus shifting from prioritising top-line growth to building a more relevant and competitive fashion business with a disciplined approach to capital allocation and ROI. At the same time, we are working to reinforce our credibility as a leading destination for our fashion-loving customers.

“We have made good early progress against a number of measures to simplify the business, including re-positioning our inventory profile, reviewing our operational model in our top markets and reducing our cost base.”

ASOS also aims to optimise the use of its Lichfield fulfilment centre to eliminate UK split orders. The Lichfield DC at Fradley Park in the Midlands, was opened in 2021. It features a 15m clear internal height, 50 Kn/m² floor loading, 36 lock level loading doors and six level access doors, as well as 33,000ft² of high-quality offices. Along with a large secure yard, the site includes 540 car spaces. The building was let on a 15-year lease by AEW and Allianz Real Estate. At the time of the facility’s opening ASOS said it expected to ship over 30 million units in the site’s first year, and up to 4.5 million per week once the facility was fully operational and automation is complete.

The warehouse closures are set for the last half of 2023. The UK facility set for closure has yet to be identified.

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