ASOS shutters US warehouse as part of cost-saving turnaround plan

Asos has announced a £200 million one-off impairment charge after deciding to mothball its major US warehouse near Atlanta, Georgia, in a move designed to cut costs and boost profitability.

Later this year, the online fashion retailer’s American customers will be served from its automated UK distribution centre in Barnsley and a smaller, more flexible facility in the US.

Closing the Union City site is expected to increase Asos’s pre-tax earnings by £10 million to £20 million from 2026, although it will also result in a £190 million impairment this financial year. The news sent Asos’s shares up by 6.5 per cent on the day, despite a more than 85 per cent decline over the past five years.

While Asos’s US arm has remained profitable, the company acknowledged that neither American demand nor stock levels could justify keeping a large-scale warehouse. Competition has intensified from fast-fashion challengers Shein and Temu, with rival Boohoo also retreating by shutting its own US site. According to Asos, its plan to service stateside customers from the UK and a smaller American facility will increase product variety and reduce fulfilment costs, though shoppers will experience slower delivery times.

Asos said only seven direct employees are affected by the closure, with logistics partners aiming to redeploy hundreds of staff to neighbouring sites. This move follows a series of “medicinal” actions prescribed by chief executive José Antonio Ramos Calamonte to stem losses and reset the retailer’s business model. The strategy emphasises lower stock levels, fewer discounts, and a ‘test-and-react’ approach to inventory.

The shuttered Union City warehouse was first opened in 2018 under former chief executive Nick Beighton, who viewed it as a landmark investment for Asos’s North American expansion. Analysts at Panmure Liberum suggest the closure signals “an acceptance of lowered long-term ambitions” for Asos in the US. Others, like Deutsche Bank, still see “a large opportunity” for international growth in both the US and Europe, where Asos retains local infrastructure.

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ASOS shutters US warehouse as part of cost-saving turnaround plan