Boohoo is realigning its operations in the US as part of its strategy to “reposition the group for sustainable, profitable growth”.
The online fashion giant will stop using its US warehouse in Pennsylvania, which opened just last August, and will now fulfil all US orders from its automated distribution centre in Sheffield, in a bid to broaden its product offering for shoppers across the pond and expand its routes to market.
This decision follows a successful trial that expanded the range of products available to US customers by fulfilling orders from the UK.
Previously, US customers had access to only about 60% of the styles available in the UK
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Boohoo said it “remains excited about the opportunity in the US” and has been developing broader routes to market strategies. This includes the recent launch of Nasty Gal in Nordstrom stores and ongoing discussions with major US brands for potential new market opportunities for other group brands.
It added that the move will also result in a significant reduction in ongoing costs over the medium term.
Shore Capital equity Aaalyst Katie Cousins said: “We have previously noted the Group’s struggle to gain traction in the US despite investing to grow market share and improve delivery times for consumers.
To us, the change short life of the US warehouse (previously stated as a key pillar of growth for Boohoo) is concerning, highlighting a naivety of the American market, along with a waste of time and resources.”
Last month, reports emerged that the business is considering a sale of its London Soho office building that it acquired in 2021 for £72m.
The fashion group is said to be in discussions with prospective buyers for the 43,963 sq ft office block at 10 Great Pulteney Street.
It comes as the group’s lenders are understood to have drafted in advisers at FTI Consulting to discuss refinancing options for part of Boohoo’s £325m debt.
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