Fast fashion etailer Asos will shutter its Lichfield warehouse in a bid to save £20m a year, as its delayed results show £300m losses before tax.
The Staffordshire warehouse closure, which only opened two years ago, follows the winding down of three “ancillary” storage facilities, one in the UK, one in Europe and one in the US earlier this year.
This latest facility closure is part of wider plans to significantly reduce how many products Asos stocks, as it scales back its “infinite aisle” of clothes.
Reports this week suggests it may look to offload the Topshop brand, however it is unclear how much the former Arcadia brand might be worth at present and whether any talks with potential buyers have yet taken place.
Asos failed to comment on the potential sale, instead the fashion site focused on its turnaround efforts, which will see it prioritise a shift ‘Back to Fashion’. It has already reduced stock levels by around 30% over the past year, but told investors it will cut stock numbers by a further 16% over the next year.
The Bristol-based retailer will also invest £30m more on marketing, and plans to build “an always-on influencer programme”.
While it expects sales to decline by 5% to 15%, José Antonio Ramos Calamonte, chief executive officer of Asos, believes there has been progress made.
He said: “FY23 was a year of good progress for ASOS in a very challenging environment and I am proud of what the business has achieved. We have reduced our stock balance by c.30%, significantly improved the core profitability of the business, strengthened our balance sheet, and refreshed our leadership team.
“Encouragingly, stock that was brought in under our new commercial model over the summer months has performed strongly and this gives us the confidence to accelerate the rollout of our new processes. As such, we are taking decisive action in FY24 to clear stock brought in under our old model while substantially improving our speed to market and investing in our brand, reminding our customers what we’re really about: fashion.”
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