Major retailer to mothball £90m fulfilment centre

Fast fashion giant Asos is set to close its £90m Lichfield fulfilment centre, after opening just two years ago.

The announcement comes as Asos reported a £296m loss this year, a major difference from its £32m loss in 2022. CEO José Antonio Ramos Calamonte has blamed a “high level of stock” which was “exacerbated by poor operating practices – we were too slow and inefficient”.

In its trading report, the retailer revealed it has already decreased its stock by 30% in the last twelve months, with plans to operate with 16% less stock by 2024, resulting in the closure of the 437,000 sq ft centre at Fradley Park.

The £90m development features more than 407,000 sq ft of warehouse space together with 30,000 sq ft of offices. 700 people were recruited at the facility in 2021, with Asos once planning to increase that number to 2,000 over three years.

The decision to open and automate Lichfield was taken in 2019 without the ability to break the contract says Asos.

Now the site will be “mothballed” following the completion of the automation work at the end of FY24 costing £45m and is expected to save the online retailer around £20m per year. CEO José Antonio Ramos Calamonte said that mothballing the site, “provides the flexibility to either sell the facility or re-open it, depending on our capacity needs”.

The firm does not anticipate a return to profit until 2025 so is looking to simplify processes and remove wasted time and cost to reinvest into productive commercial activities.