Asos is mothballing a giant warehouse it opened just two years ago as sales slump and losses spiral towards £300million.
In another bleak set of results, the online fashion group said it would save £20million a year shutting its hub in Lichfield, Staffordshire, in a move that could cost hundreds of jobs.
The decision to close the £90million site, which opened in 2021, came as annual losses for the 12 months to September 3 widened to £297million from £32million the previous year.
Revenues fell 10 per cent to £3.5billion and Asos warned sales could fall by as much as 15 per cent in the current financial year.
Asos shares fell 7.7 per cent, or 30.4p, to 365p, and are down 27 per cent this year and more than 95 per cent since its peak in 2018.
Sales down: Asos said it would save £20m a year shutting its hub in Lichfield, Staffordshire, in a move that could cost hundreds of jobs
‘Another day, another profit warning from Asos,’ said Russ Mould, investment director at AJ Bell.
Alongside rivals including Boohoo, Asos has seen the online shopping boom during the pandemic fade away, leaving it struggling to hold on to its young consumer base as shoppers return to the High Street.
The number of active customers shrank 9 per cent to 23.3m over the year.
Chief executive Jose Antonio Ramos Calamonte has been fighting to overcome challenges including high volumes of shoppers returning online orders and soaring costs.
In contrast, High Street stalwarts like Next, Marks & Spencer and JD Sports have enjoyed a boom.
There has been speculation that Topshop could be sold, less than three years after Asos purchased it from Sir Philip Green’s beleaguered empire.
Julie Palmer, partner at Begbies Traynor, said: ‘It could be that this trading environment is pushing the retailer to shore up its balance sheet by offloading assets as quickly as its unwanted clothes.
Cutting away dead wood may not be enough to get this business back on track.’
Asos is trimming what it sells, Calamonte said. It has already reduced stock levels by around 30 per cent over the past year and is aiming for a further cut of 16 per cent over the next 12 months.
Clothes introduced over the summer under the new approach sold well, Calamonte said, asserting that it had found a ‘winning formula’ for growth.
Mike Ashley’s Frasers Group has built up a stake in Asos and Boohoo, fuelling speculation over the future of both.
