Online fashion retailer Asos has announced plans to shut down its distribution centre in Georgia, USA, as part of a strategy to enhance profitability and streamline operations. From late this year, the company will serve US customers from its automated UK fulfilment centre in Barnsley, alongside a “smaller, more flexible local US site.”
The Atlanta warehouse is set to close in the second half of the year and subsequently be sold, following a multi-year warehouse automation project. The company anticipates a £10m-20m boost to pre-tax earnings from 2026, despite a £190m impairment this year, as reported by City AM.
Its share price saw a 1.7 per cent increase in early trades, although it has dropped by over 11 per cent since the beginning of the year. The seven directly affected Asos employees will be “offered alternative roles where feasible”, while the company’s logistics partners will strive to redeploy several hundred staff to nearby sites.
Asos believes that this move will enhance the variety of clothes available to its US customers and reduce the total fulfilment cost per order. “Asos remains excited about the opportunity in the US market and believes that its new operating model will better serve its US customer-base, while generating a better return on investment,” the company stated.
This decision follows a similar move by Boohoo last year. Asos reported an operating loss of £331.9m for the year to 1 September, 2024, marking an increase in its year-on-year loss.
In its latest financial results, Asos announced the completion of its lengthy restructuring process, stating that the “foundations of a more agile and profitable business are now in place.”
This included job cuts, inventory reductions, and streamlining operations. The company also refinanced hundreds of millions in debt and sold its stake in Topshop as part of a joint venture.
José Antonio Ramos Calamonte, Asos’s CEO, claimed the company is in “the strongest position it has been in years.”
However, this move indicates there may still be more work to do.
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