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Asos to close Atlanta distribution centre in bid to boost profitability

Asos to close Atlanta distribution centre in bid to boost profitability

Asos is set to shut its its main US distribution centre in Atlanta in the second half of the year and to fulfil orders from the UK, which it says will increase profitability and improve speed to market for its products.

The online fashion giant intends to put its Atlanta site, which has undergone a warehouse automation project since 2017, up for sale after its closure later this year.

Asos noted seven employees would be directly affected, while third-party logistics partners would “make efforts to redeploy several hundred staff”.

From the second half of FY25, US customers will be served through Asos’s automated fulfilment center in Barnsley, UK, along with a “smaller, more flexible” US-based site.

Additionally, the retailer plans to launch its “Partner Fulfils” program in the US during FY25.

The new distribution strategy aims to provide US customers with an expanded product range while also lowering the total fulfilment cost per order.

Asos anticipates a £10-20m EBITDA benefit from FY26 onwards, following approximately £190m in non-cash fixed asset impairments in FY25. The company added that the impact on FY25 free cash flow is expected to be roughly neutral, and its medium-term guidance remains unchanged.

The fashion etailer said it “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,

It emphasised that the US continues to be a key market for the fashion retailer, which it expects to return to sustainable revenue growth and achieve around 8% adjusted EBITDA margins over the medium term.

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