A fashion retailer has confirmed it plans to mothball its distribution centre in Fradley.
ASOS only opened the site in 2021, but said it had opted to take a new direction after seeing revenue fall by 10%.
A statement accompany the business’ financial results said the decision was taken as part of efforts towards “a profitable return to growth”.
Chief executive officer, José Antonio Ramos Calamonte, said:
“Under our new commercial model, we will operate with less stock going forward.
“Having already reduced stock levels by circa 30% over the last 12 months, we have a further circa 16% reduction planned. In this context, we have reviewed our capacity requirements and started a process to mothball our second UK fulfilment centre in Lichfield following the completion of our automation work.
“The decision to open and automate Lichfield was taken in 2019 without the ability to break the contract. Mothballing the site provides an annual cost saving of circa £20million and provides the flexibility to either sell the facility or re-open it, depending on our capacity needs.”
José Antonio Ramos Calamonte, ASOS
When the site opened in 2021, the company said it would invest £90million in the site and create thousands of jobs with the expectation that it would eventually be capable of sipping 4.5million items a week.
But now the site is set to be shuttered for the foreseeable future.
The ASOS chief executive officer said the change of direction was part of broader plans to refocus the business.
“This 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, 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 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.”
José Antonio Ramos Calamonte, ASOS
