Asos is to close its Midlands warehouse just two years after opening as it looks to cut costs in its hunt to improve profitability.
The online retail giant said it would shutter its fulfilment centre in Lichfield, Staffordshire, despite having invested £90m to fully automate the site.
The warehouse has more than 700 employees, however they do not directly work for the fashion retailer.
Subscribe to Retail Gazette for free
Sign up here to get the latest news straight into your inbox each morning
Asos chief executive José Antonio Ramos Calamonte said on Wednesday: “The new commercial model we are running, with 30% less stock than at the beginning of the year, is a formula that runs much lighter in stock and hence we don’t need such a big logistics footprint.
“If we don’t need a facility, we simply mothball it.”
He added that closing the warehouse would save the retailer about £20m a year and that it had the opportunity to sell the site or reopen it in the future if needed.
The retail boss’ comments came as the fashion giant revealed it had plunged to a pre-tax loss of £296.7m in its year to 3 September, widening sharply from last year’s £31.9m loss.
Calamonte, who is spearheading the retailer’s turnaround, announced at its results that the retailer was entering the second stage of its revival plan that would see it “prioritise a shift Back to Fashion” after spending the last year focusing on cost-cutting.
Click here to sign up to Retail Gazette‘s free daily email newsletter
